Financial Week in Review | Nov. 28

1 December 2008

As 2008 claimed yet another company, Phantom Fiber Corporation, the 20 e-gaming stocks surveyed by IGamingNews were up 2.3 percent.

GigaMedia Ltd., last week’s biggest loser, was, appropriately (given the fickle market), this week’s leading gainer, up 19 percent. Playtech Ltd., by contrast, fell 13.3 percent.

Although Playtech said earlier this month that average daily revenue had grown in November over October, share value has fallen 20 percent since Nov. 10 -- the day before its third-quarter key performance indicators were released.

Ivor Jones, an analyst bearish on the stock since initiating coverage last summer, expressed skepticism about the company’s high-profile deal with William Hill and called attention to the fact that Teddy Sagi -- the company’s founder and a man Mr. Jones called an astute and knowledgeable investor -- will be cashing in.

Perhaps the weightiest story this week was AsianLogic Ltd.’s decision to scale back its credit betting business and the profits warning that decision engendered.

The credit betting business generated roughly 90 percent of AsianLogic’s revenue, but at a very low margin. The company, Chief Executive Thomas A. Hall told IGN, will now diversify revenue toward higher margin retail clients whom the company can serve directly.

Its house broker, Collins Stewart, has reduced full-yearly forecasts and is projecting that profits will fall 15 percent from $8.4 million.

The company’s shares fell 13 percent this week, due, in part, to a distressed seller in the United States that Mr. Hall identified as a hedge fund and major shareholder.

In back-page news, Playwize, a company that developed three-dimensional poker software but whose shares are suspended in London, said that work on its overdue full-yearly results will commence in the “near future.”

No update was given on the sale of its poker software technology, though Ladbrokes -- Playwize’s only white-label client -- or Microgaming Software Systems Ltd., we think, could be in the running.

Ed Andrewes, managing director of e-gaming at Ladbrokes, told IGN in October that he was aware of the buyer’s identity but could not disclose.

Finally, Les Echos, a French-language newspaper, reported that Société des Bains de Mer, operator of luxury hotels and casinos in Monaco, has taken a 50 percent stake in Mangas Capital Gaming, the parent company of Betclick.

The Société des Bains investment, the paper said, is worth around 100 million euros and is expected to be finalized before yearend.

Mangas Capital is headed by Stéphane Courbit, the former chief of Endemol France before selling that company to Spain's Telefonica S.A. for 450 million euros last year.

Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.