Public Climb In On Party Gaming
Published: Saturday, July 02, 2005 Online-Casinos.com
PUBLIC CLIMB IN ON PARTY GAMING
Stock populat with both institutional investors and the public
Dominating the week's business headlines, the Party Gaming IPO in London was
keenly followed by industry observers from its start with institutional investors
buying the stock to the public's involvement later in the week which saw the
stock climb from 116p to almost 150p as we went to press.
The shares gathered steam as the public entered the market following institutional
investor buying which saw the shares up almost 14 percent. Public sentiment
drove the stock up a further 6.5 percent Thursday.
The stock was at 149 pence ($2.65) in late afternoon dealing on the London Stock
Exchange, well above its offer price of 116 pence at the start of trading earlier
this week.
Associated Press reports that the market value of the Gibraltar-based company
now exceeds GBP 5.7 billion ($10.21 billion).
Analysts had originally expected an offering that would value the company at
close to 5.5 billion pounds ($9.9 billion), given the boom in the worldwide
online poker market -- of which PartyGaming estimates it has a 55 percent share.
But PartyGaming said it planned to sell shares at between 111 pence and 127
pence, a lower than expected range. Some analysts blamed that on investors'
fears about a U.S. clampdown on online gambling. PartyGaming, which runs the
partypoker.com Web site, derives about 87 percent of its income from U.S. gamblers.
PartyGaming's online poker gaming room has attracted more than 1 million users
since it was set up in 2001. Customers pay a rake to the company to play against
each other on individual tables of up to 10 players or in tournaments.
It is estimated that the majority of its earnings last year came from the US,
with Party Gaming generating a pre-tax profit of GBP 371 million ($665 million)
in 2004. During the first three months of the 2005 financial year earnings growth
has continued and sales have almost doubled from the same period a year earlier.
The group, formerly known as iGlobalMedia, also has gaming brands including
Starluck Casino and PartyBingo.
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