PartyPoker.com's PartyGaming shares drop 33 percentInvestors wary after the company announced online gaming growth won't be as high as expected |
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By Bob Pajich
Shares of online gambling company PartyGaming dropped 33 percent this morning on the London Stock Exchange, down from 156.75 pounds to 105 pounds, despite reporting an 81 percent increase in revenues from the end of 2004 to June of this year.
PartyGaming owns PartyPoker.com, PartyCasino.com, StarLuckCasino.com and PartyBingo.com. The company reportedly made $437 million the first six months this year, with most of that coming from its poker operations, according to the operating and financial review that was released today (Sept. 6).
It appears that the exchange price was driven down by investors with the announcement that PartyGaming expects the rate of online gaming growth to be moderate the rest of the year.
Against this background, PartyGaming expects revenues to be lower than the rates previously experienced by the company.
Also, player rates and player yields have declined at a faster rate than expected, according to the report.
About 80 percent of PartyGaming customers live in the United States. The company is working hard to expand the number of customers in other countries as the U.S. struggles with how to regulate online gaming.
PartyGaming will make several customer-driven changes in 2006. The largest will allow customers to seamlessly move money from each of PartyGaming's sites. Multi-lingual and multi-currency offerings will be added in the second half of 2006.
PartyGaming is the first online gaming site to go public in June of this year. When it first hit the market, it instantly became one of the wealthiest company on London's Stock Exchange, making it bigger than British Airways.
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