Sinking WPTE Stock Prices Get No Life Raft from Lakes
In the understatement of the year, I am no stock market expert, I just read the occasional stock picking newsletter. But this news doesn’t look promising.
In an announcement on October 7th, Lakes Entertainment announced a stock dividend in all 12,480,000 shares in WPT Enterprises. That would be 61% of all outstanding common stock in WPTE.
“The spin-off of WPTE shares to our shareholders provides an option for them to monetize the value of WPTE shares if they so choose,” said Tim Cope, President and Chief Financial Officer of Lakes. “In addition, Lakes will benefit in that we will no longer be required to consolidate WPTE’s financial and business information in our SEC filings. This will enable us to provide greater transparency of Lakes’ operations and financial results to our shareholders and the public.”
Not long after WPTE was notified that it would be delisted from Nasdaq if it couldn’t bring the stock price back up to $1 or more for ten consecutive days in the next six months, Lakes seems to be bailing on the WPTE. While experts said that this won’t affect WPTE’s already-sinking stock prices (closing at $.50 today), it does signify Lakes’ intention of stepping back. Though there may not be any hard feelings between the two companies, it is a tough-love sort of move on the part of the company that once loaned the WPT money to get it off the ground. Kinda like kicking your 30-year-old son out of the house to make it on his own, knowing there is potential there and not wanting to aide his lazy ass for another day. Okay, probably not the best analogy, but it’s all I’ve got.
bluffdiver says:
October 9th, 2008 at 6:08pm
I think there is more going on here than LACO throwing in the towel. Keep in mind that when this dividend is paid out, Lyle Berman himself will be holding about 2.5 million WPTE shares, which is a highly illiquid stock. In addition, his son Brad was buying WPTE shares as recently as August. I think there will be a deal to take the company private at some point in the next 6 months.
www.codingthewheel.com says:
October 9th, 2008 at 11:04pm
These companies have been surfing on the surplus of the post-Moneymaker boom, a boom which is now over. And when you get right down to it, what service or product does WPTE actually provide? Poker tourneys? Broadcasts? DVDs? Nothing real, in other words. Even without the worldwide economic crunch, the business case for WPTE does not look very good.
DanM says:
October 9th, 2008 at 11:29pm
***a boom which is now over***
While I definitely agree with you as it pertains to America … can you say the boom is over if it’s still going on in Europe? I spent some time over the past few days talking to a German events promoter, and he tells me of poker gatherings there where they are preparing for, say, 2,500 players/attendees and getting 5,000. That sounds like 2005/06 to me!
Is it possible that opposed to a bubble that burst it’s more of a “wave” — and that wave simply has passed us by, is now over Europe, headed to Asia?
(And if that’s the case, is it more like an ocean wave that simply passes over something or a stadium wave that comes back around?)
***what service or product does WPTE actually provide?***
I think I saw a WPT-branded chip set and fold-up table in the way-way back of the Wal-Mart clearance bin. That’s a product.
OK, I semi-jest … but the WPT is more than just a television production (which is still relatively entertaining).
The WPT boot camps are still extremely successful.
And now they’ve got the online amateur league, ClubWPT.
***the business case for WPTE does not look very good***
That could be said for just about any four-letter stocks these days. Just playing devil’s advocate, here.
Johnny Hughes says:
October 10th, 2008 at 4:16am
Getting delisted from NASDAQ will eliminate the stock from some index funds. Helen Keller died, so no one is buying stock. I put the out house on eBay because I just lost my ass.
Johnny Hughes
www.codingthewheel.com says:
October 10th, 2008 at 6:58am
I suppose time will tell.
www.codingthewheel.com says:
October 10th, 2008 at 6:59am
I left a previous comment (longer) but it seems to have gotten swallowed by the system. Just my luck. I’ve been running bad all night.
bluffdiver says:
October 10th, 2008 at 9:59pm
delisting will not be an issue, because the company will be taken out before that. makes no sense to stay public at this point and all signs point to going private.