As reported by: The Independent
PartyGaming, the online poker giant that floated amid a blaze of publicity in June, had more than £2bn wiped off its valuation yesterday after it admitted that the internet poker craze had started to wane.

Shares in the group, which is set to enter the FTSE 100 next week, fell 33 per cent. Yesterday's frank admission that the growth rate was "moderating" contrasted with the rosy picture PartyGaming painted of its future prospects less than three months ago, when its initial public offering raised a little less than £1bn for its owners. Shares in PartyGaming closed down 51.75p at 105p, below the 116p issuance price.

Its warning knocked the halo off the entire online gaming sector. Empire Online, the poker marketing group at the receiving end of a 270p-per-share approach from Sportingbet, lost 11 per cent of its value to 252p, while its suitor's stock sank 16 per cent to 311p. BetonSports lost 14 per cent to 144p and UKBetting fell 3.25p to 55.25p.

James Hollins, at Daniel Stewart Securities, said: "The market has got a right to be upset. PartyGaming came out with all guns blazing and got a lot of money for its owners. Just two months later to come out with this statement was quite a shock."

Analysts said the weaker outlook could threaten the forthcoming flotation of 888.com, valued last week at £700m. At the time, John Anderson, 888.com's chief executive, predicted growth for online poker would be "explosive". A spokesman for the group said its plans were still on track, stressing that 888.com is predominately a casino, not a poker, operator.

PartyGaming issued its warning alongside maiden interim results that showed revenues soared 81 per cent in the six months to 30 June to $437.4m (£243m). Underlying earnings before share options and expenses related to its IPO rose 70 per cent to $257.7m. But investors opted to focus on the warning that sales would not continue to advance at that rate.


Article By: The Independent