RivTrend Performance
The RivTrend Global I-Gaming Stock IndexTM, which tracks the performance of leading gaming companies around the world, was slightly on the decline last week, perhaps a bit of a hangover following the previous week's news of the Nevada legislature passing its online gambling bill. On Friday all three indices closed with lower numbers than the previous Friday.
The EuroAustralian Index was down 5 percent, closing at 108.18 while the previous week the index closed at 113.57. Boss Media (BOSS), one of the biggest software suppliers in the industry, has watched its share price fall throughout the week. It opened last week at nearly 35 kroner before dropping to just over 31 kroner on Thursday. Friday, BOSS began climbing back before closing at a hair over 32 kroner.
The North American Index closed at 141.08, down 4 percent from the previous Friday's closing of 147.59. One of the leading companies in this index, CryptoLogic Inc. (CRYP), saw its stock price soar following Nevada's move to set up the groundwork for regulating Internet casino gambling. This past week remained a good one overall for Crypto, although its share price fell on Thursday to the $21 range after maintaining prices well above $23 all week. Last Friday, Crypto opened at $19 before climbing back up to close at $23.70.
The widespread downturn left the Global Index down 5 percent for the week. Friday's figures were 111.02, compared to the week before, which closed at 116.51. The honeymoon following the news in Vegas appears to have been short lived as honeymoons so often are.
Less Respect for AIM
A new study by accounting firm HLB Kidsons indicates that companies are losing respect for the Alternative Investment Market (AIM), an exchange launched in 1995 as a way for British growth companies to raise capital cheaply. Among those surveyed, 81 percent of the respondents said that the AIM was either "not very attractive" or "not attractive at all" to customers. This dramatically exceeds the disenchanted 31 percent last year that answered the same in a similar quiz about the exchange.
The AIM was lambasted in the survey for being too costly and having a low turnover in share volumes and was even considered as having a "lack of market makers." In reality, the AIM has seen its number of market makers grow during the past year along with share turnover volume. An article by Out-Law suggests that many investors have lowered their perceptions of the exchange because it had been promoted to so very few. Only 1 percent of respondents could remember receiving any AIM promotion during the past 12 months.
Fake Press Release Case Dismissed in Court
A Manhattan judge has dismissed a case against two wire services that unwittingly published a false press release that severely damaged a company's stock price. The situation arose last year when former Internet Wire staffer Mark Simeon Jakob filed a false press release about the fortunes of Emulex. His news release, issued August 25, 2000 through Internet Wire and Bloomberg, claimed several serious problems were dogging the company. Among other things, Jakob's release said that the Securities and Exchange Commission was checking into the company, while the company's earnings were going to be republished and its CEO had quit.
The news worried stockholders, who began dumping shares as quickly as possible. Thanks to this reaction, Emulex investors lost nearly $1.1 million and the company lost $2.3 billion in market capitalization. The company's stock price swiftly fell from $113 to $43 in just a few short hours before company officials were able to publish the truth and halt trading.
Not long after Jakob was arrested and charged with securities and wire fraud, to which he has since pled guilty.
Despite the culprit being caught, investors were angry that the press release was published and they filed a shareholder lawsuit against the two news services. U.S. District Judge Milton Pollak, however, last Thursday dismissed the case on the basis that it "reveals that defendants were used as unwitting dupes by Jakob."
An attorney for Internet Wire told the Associated Press, "The judge did the right thing. Internet Wire, like Bloomberg and everyone else, was a victim of a fraud here. Under federal securities law, there clearly is no liability."
The case hasn't been buried yet; attorneys for the disgruntled investors say they will consider an appeal. "We strongly believe that we have properly alleged claims against Bloomberg and Internet Wire under the federal securities laws, despite the ruling," one attorney commented. "We haven't made a decision of what our next step will be."
Youbet Details Competitive Position, Associated Performance
As part of its virtual investor presentation last week, officials at Youbet.com (UBET) announced several talking points that show the company is going through an upswing. For one thing, officials say that Youbet is competitively positioned with unparalleled content and technology and has an extensive market opportunity ahead. In addition, they say the firm has strong growth catalysts delivering significant revenue upside while expectations are that the Youbet network will expand and see increased handle. Officials also say that the company is targeting positive cash flow and will see profitability by the first half of next year.
One of the key driving forces for Youbet's glowing outlook was the establishment of a strategic relationship with TVG (a wholly owned subsidiary of Gemstar-TV Guide International). The deal was announced May 21, 2001. "Our ability to partner with key industry participants not only validates our technological advantage, but has created an incomparable selection of content and information available through the Youbet network," said CEO Robert Fell. "We are also benefiting from extensive industry exposure and new audiences, both from our relationships as well as our technology enhancements such as our new Web-based horse racing product, Youbet Express. Now that our network is complete with virtually 100 percent of the market, including content and access to domestic horse racing handle, we are aggressively pursuing substantial growth opportunity, both operationally and financially."
A recording of the Youbet investor presentation can be accessed online for 30 days at www.youbet.com or through June 21 by calling 1-888-266-2086 and using passcode 5296312.
eLOT Announces Investor Conference Call
eLOT (ELOT) officials announced that the company will be holding an investor conference call today at 2:00 p.m. EST. Much of the call will be devoted to discussions about the recently announced asset purchase and management contract with FreeLotto. The conference can be accessed by calling 212-346-7488 or visiting www.vcall.com.
GTECH to Cover First Quarter Earnings in Conference Call
As part of the company's upcoming investor conference call, GTECH (GTK) officials will release first quarter earnings for fiscal year 2002. The call is scheduled for tomorrow at 9 a.m. EST and can be accessed either by telephone, at 612-332-0634, or over the Internet, at www.gtech.com. (Click "Investors" where "Live Broadcast" is located.) A replay of the call will be available later tomorrow by calling 320-365-3844 and using passcode 590125.
More Opinions from the SUBWAY.com
Financial analysts at the SUBWAY.com are giving the thumbs-up to I-gaming-related firms Youbet.com and eLOT.
Youbet was rated "accumulate" after shares in the company closed last week up 18 percent to $1.25 on a volume exceeding 1.3 million shares.
In addition, eLOT was rated "attractive" after its shares climbed 30 percent last week, closing at $0.65 on a share volume of more than 3.5 million.
First Quarter Results Good for GAMM
Global Entertainment Holdings/Equities Inc. (GAMM) announced first quarter net profits of $58,695. While this is lower than the $81,289 reported first quarter last year, these figures continue a trend for the company that has it showing three years of improved bottom line performance. At the same time, GAMM's revenues decreased slightly to $1,102,253 for the quarter ended March 31, 2001 as compared to $1,111,582 for the same period last year.
Revenues are derived from software sales and website services for licensees generated by its subsidiary, Interactive Gaming & Wagering and from advertising and sponsorship revenues generated by its other subsidiary, Prevail Online, Inc.
The company also reported that revenues for IGW continued to grow, ending up 16 percent at $1,022,028. This amount represents 93 percent of GAMM's total revenue for the quarter, an increase over the $878,059 in revenues reported for same period last year. Although some royalty fees were reduced recently, there was an 8 percent increase in royalty fees received overall. Other revenue sources, meanwhile, grew 54 percent. GAMM officials also praised IGW's continued improvement, as shown by the subsidiary's 79 percent upswing in net profits from operations, hitting $224,174 while the same quarter last year was $124,939.
GAMM's Prevail subsidiary, meanwhile, reported revenues of $80,665 for the quarter, much less than the $233,727reported a year ago. The lower amount was attributed to management changes and office relocation to Arizona. This amount also accounts for 7 percent of GAMM's total revenues.
As for I-gaming licensees, company officials expect to add two more by June 30 and another four more by the year's end. They also expect that net profits for the year ending December 31, 2001 will at least double the $256,497 reported at the close of 2000.