Party Gaming, Harrah's, MGM looking to purchase smaller on-line sites - Page 4

StellarWind · #31 10-03-2006, 01:43 AM

I see Party and 888 execs desperately trying to divert the attention of stockholders and affiliates from the disastrous concession of their #1 market. This report is quoting nonsense.

Use scarce capital to buy up other poker rooms? Exactly how would that work? Party already has more tangible assets and staff then they could possibly use to run their shrinking business.

The only thing of value they would acquire from the smaller room is customers. But most of those customers are either Americans or already have a Party account. Most of the rest have heard of Party and would have an account if they wanted one.

As for Party and 888 being acquired by Americans? That's not going to happen at any price the stockholders want to hear about. Both companies need to demonstrate that they are even viable businesses in the new environment. Look at what is happening to Party:

1. More than half of their revenues gone overnight. No doubt the drop in profits and ability to service debt will be much larger.

2. Game selection will be greatly reduced and games will likely be tougher. This was perhaps their #1 competitive advantage and now it is going away.

3. Loss of much of their affiliate network. Many fishnet sites with American focus but worldwide readership are going to dump them. Their precious non-U.S. customers are going to be steered elsewhere when they go to the web for advice.

4. Smaller customer base to spread the cost of marketing and system improvements over.

5. Loss of buzz. They are going to merit a lot less publicity and attention in the future. No longer will they be synonymous with online poker in the public eye.

6. Competitors energized by new revenues from refugee customers. This money will become increased engineering and marketing expenditures.

Party and 888 have become fat and corporate. Moving from Antigua to London may not have been such a hot idea. Many of the second tier players are much tougher and hungrier and so are the nations that host them. In order to win they'll do the things Party is no longer willing to do.

Party could become irrelevant very quickly. I've always said that the main reason Party is big and successful is because they are big and successful. Once they start to lose their position it could all collapse very quickly.

goodgrief · #32 10-03-2006, 01:48 AM

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On the other hand, the people wanting marijuana leaglized are going around baked all of the time.

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Ah to be young and naive. The people doing the most to get marijuana legalized are people who are fighting cancer, HIV, glaucoma, and other serious diseases who would like to be able to survive chemo and keep their food down. And "they" still don't care. Former Attorney General Ashcroft had a special hard-on for prosecuting sick old people, but I haven't noticed Gonzales calling off the dogs and telling federal prosecutors to leave the growing clubs or users alone.

I don't think you're going to get far by presuming that online poker is a more acceptable cause than marijuana. I would argue that there is a much larger group of people sympathetic to the marijuana user, especially the older user with a medical condition.

There is nothing to be gained by divide and conquer or an attitude of "my online poker is better than your dirty drugs." Like it or not, both are considered to be vices by the American Taliban that wants total control of our lives.

MicroBob · #33 10-03-2006, 02:09 AM

Party cuts off U.S. customers.

Then Party says they are going to buy up the sites that are hurting because of the loss of U.S. customers??

Ummmm, hello?? The other sites are HAPPY that they will get a chance to gobble up your booted-out U.S. customers.

It seems like many of the smaller sites would have aspirations of GROWING these days...not disappearing.

The sites that continue to accept U.S. players are going to be hurt far less than the giant site that is voluntarily kicking out 80% of their own players.

Party is the site that is being impacted the MOST by the loss of U.S. players. Yet they act like it's all the other sites that will be hurting.

I'm just not quite getting it.

Agree with Stellar analysis that it could be posturing on Party's part.

This is just my layman's view of a bunch of corporate stuff I know nothing about.
It just struck me as weird that they would talk of the collapsing smaller sites when many on here had determined that they might be benefitting from all this.

Leader · #34 10-03-2006, 02:22 AM

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I'm just not quite getting it.

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The company is run by idiots. You'd think that wouldn't be true of a billion dollar company, but it clearly is. The only thing that kept them going before, as SW pointed out, is positive momentum. This bill stopped that cold. They made a dumb/rash decision again like they've been doing for months and they no longer had the positive momentum to over come their stupidity. Now they have negative momentum and I don't think they have the human capital to stop the slide.

adios · #35 10-03-2006, 02:26 AM

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*** You are ignoring this user ***

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adios · #36 10-03-2006, 02:30 AM

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[ QUOTE ]
I'm just not quite getting it.

[/ QUOTE ]

The company is run by idiots. You'd think that wouldn't be true of a billion dollar company, but it clearly is. The only thing that kept them going before, as SW pointed out, is positive momentum. This bill stopped that cold. They made a dumb/rash decision again like they've been doing for months and they no longer had the positive momentum to over come their stupidity. Now they have negative momentum and I don't think they have the human capital to stop the slide.

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peritonlogon · #37 10-03-2006, 02:35 AM

Things look a bit different when you consider that Party has a lot more cash on hand than anyother site (more than most businesses other than google).

Plus, being publicly traded and being in England, they need to be more legit as they (execs and workers) could be subject to extradition. This is their strategy to return #1 as quickly as possible.

MannyIsGod · #38 10-03-2006, 02:38 AM

[ QUOTE ]
Party cuts off U.S. customers.

Then Party says they are going to buy up the sites that are hurting because of the loss of U.S. customers??

Ummmm, hello?? The other sites are HAPPY that they will get a chance to gobble up your booted-out U.S. customers.

It seems like many of the smaller sites would have aspirations of GROWING these days...not disappearing.

The sites that continue to accept U.S. players are going to be hurt far less than the giant site that is voluntarily kicking out 80% of their own players.

Party is the site that is being impacted the MOST by the loss of U.S. players. Yet they act like it's all the other sites that will be hurting.

I'm just not quite getting it.

Agree with Stellar analysis that it could be posturing on Party's part.

This is just my layman's view of a bunch of corporate stuff I know nothing about.
It just struck me as weird that they would talk of the collapsing smaller sites when many on here had determined that they might be benefitting from all this.

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What better way to add more customers than to purchase another company with an already established customer base? I think you're fooling yourself if you think that in the current situation there aren't companies out there that can be had for very cheap prices.

This makes complete sense. Party just lost a large porition of their customer base and this would be a good way to add back to it. When a company is purchased, they just want the name and customers, the people working for the company being bought out in this scenario would soon be unemployed, so additional operating costs will not rise in a buyout situation.

The entire industry has been devalued, not simply Party. This type of a move(s) is extremely plausible.

Catyoul · #39 10-03-2006, 04:28 AM

Here's the original article :

http://www.ft.com/cms/s/2c2e513a-527...0779e2340.html

TimTimSalabim · #40 10-03-2006, 05:00 AM

[ QUOTE ]
Party cuts off U.S. customers.

Then Party says they are going to buy up the sites that are hurting because of the loss of U.S. customers??

Ummmm, hello?? The other sites are HAPPY that they will get a chance to gobble up your booted-out U.S. customers.

It seems like many of the smaller sites would have aspirations of GROWING these days...not disappearing.

The sites that continue to accept U.S. players are going to be hurt far less than the giant site that is voluntarily kicking out 80% of their own players.

Party is the site that is being impacted the MOST by the loss of U.S. players. Yet they act like it's all the other sites that will be hurting.

I'm just not quite getting it.

Agree with Stellar analysis that it could be posturing on Party's part.

This is just my layman's view of a bunch of corporate stuff I know nothing about.
It just struck me as weird that they would talk of the collapsing smaller sites when many on here had determined that they might be benefitting from all this.

[/ QUOTE ]

The idea is that the publicly traded companies would all be discontinuing U.S. business, as I believe most of them have, and that would make them all targets for acquisition, not being able to survive on their own, and Party being the biggest of the sector, would gobble them up. I found this article which I think explains it better.