I-Gaming Indices Fall
Tech stocks worldwide have been hard-hit lately, including those in The RivTrend indices. The RivTrendTM North American I-Gaming Sub Index closed at 65.8 on December 15, having dropped from 100.0 on its October 16 introduction. Nearly 90 percent of the decline can be attributed to four stocks: UBET, SNMM, CRYP, and ELOT. Both Youbet.com (UBET) and Starnet Communications International (SNMM) fell 62 percent during this period, while Cryptologic (CRYP) experienced its largest aggregate decline of $59 million (32 percent).
Investrend analyst John Dutton suggests that the outlook for CRYP, SNMM (potentially), and eLOT (ELOT) are significantly improving, while UBET, with its intrastate horse race wagering business model, is currently undergoing significant restructure. During this same time, the RivTrendTM EuroAustralia Sub Index has risen to 103.1, while the RivTrend Global Stock IndexTM stands at 99.9, reflecting its predominately European component.
Study Says Acquirers Look for More Than Size
Global merger activity remains strong, despite concerns about the impact of high interest rates, problems with financing, and the rising of equity markets, the Euro and energy costs, according to a year-end M&A forecast by PricewaterhouseCoopers' Transaction Services group. The group adds that the biggest change is the need to integrate acquisition strategies into the growth model of the new economy, which rewards ownership of intangible assets like brands, and penalizes companies that rely on hard assets to provide earnings.
"This is clearly a transition point in the global mergers and acquisitions marketplace," explained a Transaction Services group partner. "While there's no reason to believe that mega-mergers will fade away any time soon, it is clear that the rationale for the size-for-size's-sake deal is eroding quickly."
He added, "We are now indisputably at the end of the vertical-integration growth model and moving rapidly into a new economy model. The new model demands the disaggregation of the traditional enterprise in favor of more flexible strategic alliances to perform alliances to perform functions once thought of as core competencies (e.g., IT, manufacturing). The new models will drive greater innovation through increased flexibility and 'closeness' to the customer."
Inquiry Made into BRCA Media Rights Bidding
Legal representatives for Towcester Racecourse made unexplained allegations regarding discussions between racecourse representatives and Carlton Communications during the bidding process to acquire the media rights to U.K. horseracing. "Whilst no evidence has been produced to back up the allegations made, they are of sufficient concern to back up the allegations made, they are of sufficient concern to persuade us that an inquiry should be carried out," the Financial Times quoted RCA chairman Angus Chricton-Miller. "We have the duty to seek the necessary reassurance, or otherwise, that the behaviour of the parties involved has been above board," he added. Carlton Communications was bidding against Go Racing; a consortium made up of Arena Leisure, British Sky Broadcasting and Channel Four Television, for the media rights. FT reports that news of the inquiry had affected Arena Leisure's share price, which dropped 5.5 percent last Tuesday.
Cryto Names New CEO/President
Jean Noelting has been named as Cryptologic Inc.'s (CRYPTO) new CEO/president, taking over the leadership role long held by founders and brothers Andrew and Mark Rivkin. Andrew Rivkin, who relinquished his CEO position to Noelting explained, "…we need experienced leadership to take our company to the next level, and Jean brings a great combination of entrepreneurial drive, proven track record and large organization experience to advance that goal." Mark Rivkin, who stepped down as COO, and Andrew Rivkin will continue to be active directors and shareholders in the company.
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