Odds of Party collapsing on Saturday?

[SleepingDragon]

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I think most of us agree that the success of any poker site is dependent on the american fish.

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Perhaps most Americans agree on that. I'm not American and I disagree. I expect to spend more time at Party after this weekend and the departure of the American hudbots and rocks.

[sbj99]

Well I was thinking of the formula needed for their success. They need the fish to feed the sharks or the games will dry up. Maybe the non-US players have the same ratio of fish but there's still a liquidity issue. And if the serious US player continues to play while the fish dropout they'll have a serious problem. Activity will drop if only a very small percentage of players are able to make money.

[SleepingDragon]

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if the serious US player continues to play while the fish dropout they'll have a serious problem.

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For sure! I think they'll be determined to enforce their new rules, they can't afford determined players (higher percentage of sharks) to continue playing. They'll have to be proactive. They might even pick up some loose change by confiscating funds they determine were deposited in violation of their new T&C in the coming months.

In terms of liquidity, I don't see how they could have a problem. If they couldn't afford to cash out all US players in one bang right now, why on earth would they announce their intent to do so as soon as the legislation is signed? Instead they'd hang on by their fingernails as long as they could. Their announcement is a clear message that they can afford the cashouts.

[grandgnu]

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I think most of us agree that the success of any poker site is dependent on the american fish.

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Perhaps most Americans agree on that. I'm not American and I disagree. I expect to spend more time at Party after this weekend and the departure of the American hudbots and rocks.

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Pfffft, there'll only be pot-limit omaha games going at the site once u.s. players leave.

[sbj99]

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if the serious US player continues to play while the fish dropout they'll have a serious problem.

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For sure! I think they'll be determined to enforce their new rules, they can't afford determined players (higher percentage of sharks) to continue playing. They'll have to be proactive. They might even pick up some loose change by confiscating funds they determine were deposited in violation of their new T&C in the coming months.

In terms of liquidity, I don't see how they could have a problem. If they couldn't afford to cash out all US players in one bang right now, why on earth would they announce their intent to do so as soon as the legislation is signed? Instead they'd hang on by their fingernails as long as they could. Their announcement is a clear message that they can afford the cashouts.

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I meant liquidity for the players. As in it will be harder to find the game they want at any given time.

[Ace upmy Slv]

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I think most of us agree that the success of any poker site is dependent on the american fish.

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Perhaps most Americans agree on that. I'm not American and I disagree. I expect to spend more time at Party after this weekend and the departure of the American hudbots and rocks.

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Pfffft, there'll only be pot-limit omaha games going at the site once u.s. players leave.

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I don't think the loss of US players necessarily means that the ration of Sharks to Fish will change too much on sites like Party. The overall volume changes obviously. I'm a US player so I am a little bias, but I don't necessarily target US players to play against them because I view them as fish. I don't understand why this perception of US fish has gotten so strong. I have always been under the assumption that European and Asian players are normally the loose aggressive players. Europeans seems to have more 'gamble' in them if you ask me, hence why a game like PL Omaha is so popular there. Americans can sometimes be more of the tight rocks. Maybe the use of the word 'Fish' is relative to what someone would consider a good player to play against or a good table to play at.

I thin people assume US players = fish just because of the sheer volume of US players that play on the internet means more US fish. I don't think this really holds true on a percentage basis.

This would mean that the games will still be just as good, just fewer of them to choose from......

[IcyHotMonkey]

I have a question. How come investors didn't see this coming? Why did investors wait until the bill was passed before pulling out?

[Sniper]

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I have a question. How come investors didn't see this coming? Why did investors wait until the bill was passed before pulling out?

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Well some had already, just check their chart... however, here's an excerpt from an interview with the Party CEO from Sept 7th...

Q.
Are you concerned the Goodlatte-Leach Bill will be attached to another bill to help it pass through the Senate?

A.
I don't think I'm concerned. We're certainly watching it. We're actively watching it. I believe in the law-making process and watching and respecting the law-making process. At the same time I've always been a strong proponent of regulation and a regulatory framework like in the UK that could apply worldwide. I think the EU will look at it, the UK has already looked at it. I think the US should look at it, quite frankly.

You can find the full interview on cantos.com

[PokeReader]

Correction to the earlier point, exercising an option means using it to buy stock, so those three Party insiders were buying during a panic, not selling. Why, possibly because the IPO stock rules in Britain do not allow insiders to sell for several years. So the founders' wealth is almost entirely paper, and would be decimated by a company bankruptcy. Whether or not they will go under it looks like a move to shore up stock prices. Something like the paper millionaires that went broke after the internet bubble.

ABM Abrmo holds the paper on the $500 million credit line, which had a clause that triggered the renegotiation of terms if legislation passed in the U.S. While Party says it does not believe there will be a problem they have yet to reach agreement. ABM would be looking for very good terms as they do not have any other debt with the company and can currently walk away with a small loss. Party will need funds for the cashout, current expenditures, major reorganization, increased advertising expenditures in the new market concentrations, and financing for future acquisitions of non-U.S. facing I.G. properties. Word is they are looking for any increase to the $500 million ceiling. The problem is not the costs of the payouts, it is the costs of continuing to believe in the company, and the industry as a whole. Considering the amount of equity lost this week, I would expect the financial sector to steer clear of IG in general, on the basis that what happened in the U.S. could happen somewhere else after they invest another billion to refocus on other markets. Just too much insecurity for the Street.

[StellarWind]

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I have a question. How come investors didn't see this coming? Why did investors wait until the bill was passed before pulling out?

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I'll tell you a secret.

Most stock market investors including most professionals are fish. People expect the market to rationally process news and make coldly logical decisions but that just isn't the way it is.

People need to get over the efficient market hypothesis. It sounds extremely logical but it continually fails in the real world. The amount of money lost in the Party debacle is a classic example. It's not like the legislation was the only risk. In a hyper-volatile industry like online poker there are always many routes to disaster. This was a situation where the entire industry faced many threats (legislation, bots, potential scandals, poker bust) and the individual companies also face a large risk of faltering. Remember when Paradise was all-powerful? How about Planet Poker? PokerSiteScout.com is an eye-opener. Many of the top players were nowhere a couple of years ago and many of the old guard look pretty tarnished.