Odds of Party collapsing on Saturday? - Page 7

PairTheBoard · #61 10-09-2006, 12:57 AM

I have the impression from someplace that they said that there was no problem with their credit line. It got renegotiated or reestablished or something. If so, I guess they can pay their U.S. accounts and go forward with liquidity based on credit.

But what this looks like is that instead of holding Player Monies in a segregated account and in Trust for the players, they used it as excess cash to buy up Empire Poker so that Player Monies are backed up by "Intangible Assets". If that's the case then it really stinks imo. It really wouldn't be any different in principle than the infamous Dutch Boyd scandal.

Why didn't Party talk to Barron's about their cash position? Doesn't PartyGaming have a Stockholders Representative to answer such questions? Is Party protecting its Stockholders by letting this article by Barron's go unchallenged? Barron's may be biased on the bearish side but it is a well respected Financial Publication and capable of moving markets at times.

I think PartyGaming needs to come out with a statement on this before the Market opens in the morning. If they fail to clarify their cash position and let the Barron's article stand I think we will see Party Stock take a hit in the morning.

PairTheBoard

sbj99 · #62 10-09-2006, 01:10 AM

I agree, they should be putting out fires. It would be in the best interest of shareholders, if not just for the players.

The company did "dismiss" the reports on loan problems, saying they didn't see an issue and it isn't being renegotiated. I hope they're right, I just find it hard to believe the lenders wouldn't change the terms especially after reading the financial times story.

I wish someone here (where's our CPA firend?) could clarify whether or not customer deposits are included in cash/equivalents and if that liability I mentioned refers to them. Not one wall street analyst has stuck their neck out and issued a useful report since this all went down.

TomR · #63 10-09-2006, 01:21 AM

I am not certain of Party's future. The primary shareholders, from my understanding, have over $1B in stock, I doubt they are going to give up that value for an amount significantly below that amount that would be required to pay out player cashouts this week, if at all possible. But I am not sure that they have the assets outside of the stock to fund it and I don't know what the chances are that they can find funding outside, if necessary. Total cashouts this week will not be all of the player balances after all.

You also have to consider the more than three months that have passed since the 6/30 F/S. In the quarter ending 6/30/06 they earned $170M, so an amount similar to that could be assumed to be added to their assets at this time. But there was also a mention in the Barron's article of a $130M cash acquisition (which I know nothing about) made during the quarter that would almost eat up that income.

But bottom line, I wouldn't have an amount in Party that would hurt me financially if things go wrong. Partly because I don't have too much trust in those major investors from what I have heard about their backgrounds and partly because I don't have the information that lenders would have in deciding to extend credit that they may need.

Sniper · #64 10-09-2006, 01:45 AM

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Not one wall street analyst has stuck their neck out and issued a useful report since this all went down.

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Party stock is traded in London... you should not expect coverage from Wall Street analysts [img]/images/graemlins/smile.gif[/img]

sbj99 · #65 10-09-2006, 01:53 AM

There's plenty of coverage from wall street, at least 5 or 6 firms. They all put out reports around news, earnings but not this time.

Sniper · #66 10-09-2006, 02:02 AM

[ QUOTE ]
There's plenty of coverage from wall street, at least 5 or 6 firms. They all put out reports around news, earnings but not this time.

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This coverage is coming from their global markets depts... and as I've noted elsewhere, we have far more information than they do [img]/images/graemlins/wink.gif[/img]

Asianj · #67 10-09-2006, 02:03 AM

I used to be a highly rated stock market analyst - sell

I would bet serious money that the investment community does not understand that the exit of US players will lead to the exit of international pros i.e they are losing 95%, not 75%, of business. There is tremendous leverage to this dynamic.

The investment community also does not understand that in 1-3 months, party's core fish customer base (unaware something is amiss right now) will move on to other sites and forget about party. "Party Poker" brand equity will realistically eveaporate far quicker than a 40 stock price implies.

It will costa lot to rebuild - ask the folks who are trying to build absolute etc.

Please excuse my poor spelling and grammer - never my strengths.

Sniper · #68 10-09-2006, 02:06 AM

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I used to be a top stock amrket analyst - sell

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Analysts are always wrong.... this would be a clear BUY signal [img]/images/graemlins/wink.gif[/img]

bobman0330 · #69 10-09-2006, 02:06 AM

One fact that I haven't seen widely discussed is this:
On Monday October 2nd, a day when Party stock opened at less than half of its previous value, its executives cashed in something in the neighborhood of $20 million dollars in options. Does that sound like the action of executives who think their company is in sound health?

Anyone who thinks that their money is safe because Party is a publicly traded company is a fool. Sure they won't just walk away with your money, but they can, and likely will, go bankrupt. They're about to lose 85 percent of their customers! EIGHTY-FIVE PERCENT! They've been expanding a great deal lately and they don't have current assets sufficient to meet their current liabilities, if most or all of their players cash out. If it weren't for federal deposit insurance, people would often lose money in BANKS.

If you look at Party's actions, there's only one good interpretation. They've talked to people in Washington, and they know this law is going to be seriously enforced. They're all rich and they don't feel like incurring criminal liability. Therefore, they're playing it safe, and letting the company go down the tubes.

PairTheBoard · #70 10-09-2006, 02:16 AM

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On Monday October 2nd, a day when Party stock opened at less than half of its previous value, its executives cashed in something in the neighborhood of $20 million dollars in options.

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What's your source for this assertion? I saw another report saying Party Insiders have been buying stock at the depressed price.

PairTheBoard