Party Gaming revenue, stock price jump; rumor mill suggests return to US market
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One-time online poker leader Party Gaming, which has seen its traffic, revenue and share price plummet after exiting the US market in late 2006, had some good news today for shareholders. According to revenue reports released by the company, growth in the casino and sports-betting operations of the Party Gaming brand helped to offset a slowdown in poker revenue, resulting in a 5% revenue boost from last quarter.
The revenue from operations reported exceeds last year’s revenue report by nearly 25% (when US business is excluded from the comparison). Party’s stock jumped roughly 10% after the announcement.
The news comes at a time when the future of Party Gaming is a bit of a news item in itself. Recently, Party CEO Mitch Garber told the press that his company would be very receptive to buyout offers from US casinos. A few days ago, online poker news site PokerKing published an item citing unnamed sources who strongly suggested that Party was considering a reentry into the US market. Excerpt:
When the first person that I trust in this industry told me that he heard that Party Poker might be trying to find a way to get back into the US market, I had the same reaction. “Stop teasing me, it’ll never happen.”
However, after speaking with a number of people that I trust and hearing them say the same thing, I am starting to think that there might be some truth to this rumor.
The recent stock jump would make acquisition of Party a slightly more costly affair, but also signals to investors that the company has strong revenue momentum, increasing the attractiveness of the company to potential buyers.
