WPTE, Once a $500 Million Dollar Stock, Has Tanked Dramatically

Published on 2008-10-01 09:44:07

The World Poker Tour and Fox Sports Net jointly announced on Tuesday morning that they had officially launched their new television series, ClubWPT.com. Investors couldn't have cared less and continued to sell their shares, pushing the stock of the World Poker Tour down to 61 cents per share. The entire company is worth just $12.42 million dollars, a far cry from the half billion dollar valuation that the company commanded back in the summer of 2005.

The World Poker Tour received a Nasdaq delisting notice in mid August due to their common stock trading under $1.00 for 30 consecutive business days. The company must trade above $1.00 for 10 consecutive business days in order to avoid delisting, and it has 180 calendar days from the day that it received the notice to do so.

Things are obviously not moving in the right direction for the company's stock - after briefly touching $1.00 in early September, the stock has absolutely cratered and hit a low of 56 cents per share on Tuesday. The company will likely be forced into a reverse split in order to maintain compliance if things don't turn around over the next few months, which looks unlikely.

Investors in the World Poker Tour seem to be hitting the exit doors (if they haven't already left). Today was one of the highest volume days in a while, with 80,500 shares of the stock changing hands. Given that the stock still closed lower on the day, this can't be a good sign.

Brad Berman, a WPT director, purchased approximately 90,000 shares of the company stock in mid August at a price ranging from around $0.70 to $0.80 per share. The stock has still continued to fall, and others in management don't seem too eager to buy any more shares themselves. Lyle Berman? Steve Lipscomb? Peter Hughes? Robyn Moder? Adam Pliska? None of these people, who are all high up in the company, have committed to purchasing any more shares of the company in the past year. The fact that none of these people are purchasing shares at these low prices might just be the biggest indictment of the company.

The company was forced into accepting a television deal with no licensing fees after the Game Show Network refused to pick up their option for the next season of the show. The company has all but abandoned their online gaming business. Numbers are down for most World Poker Tour events. The World Poker Tour is facing a tremendous amount of competition from the World Series of Poker and European Poker Tour. The company is currently lost amid a sea of poker programming on TV, which is affecting other parts of its business (online gaming business, ClubWPT.com). Revenues are dropping, and the company is forecasting losses for the foreseeable future.

The company is flailing around but there are no life jackets left on the sinking ship. They have a cash balance of just under $12 million dollars but this will just keep getting whittled down if they continue to lose money.

Will the company go under? Or will they eventually be taken over by another company? If so, who? At this stage of the game, these seem like the only two viable options for the World Poker Tour.


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Filed Under: Random Poker News