PartyGaming Steadies after Spectacular Rise
Shares in online gambling giant PartyGaming steadied today after a hectic trading day on Wednesday, which saw the shares rise to almost 45.5p amidst a flurry of trading activity.
PartyGaming suffered heavy losses as $10 billion was wiped off the value of online gambling shares industry-wide late last year following the UIGEA. The US clampdown on internet gambling triggered an avalanche of selling with thousands of investors removing the risky stocks from their portfolios.
However, on Wednesday, it appeared as if investors were willing to put their feet back into the water. Rumors about PartyGaming have abounded in recent weeks, with many industry analysts predicting a
better-than-expected annual trading report from the company, due March 1. PartyGaming chief executive Mitch Garber sparked the rumors with his announcement that his company expected to post a full-year profit of over $140 million. This announcement resulted in the share-price steadily rising over the past fortnight.
However, the flurry of trading yesterday has been attributed to speculation that the US online gambling clampdown might be loosened or, hopefully, scrapped altogether. Frantic buying ensued when reports came through that veteran Congressman Barney Frank, Democrat chairman of the House Financial Services Committee, wanted to repeal the UIGEA and has called for a two-year amnesty. Frank was quoted as saying, “Adults are entitled to do with their money what they want to do.”
Another possible stimulant for Wednesday’s frantic trading was attributed to vague takeover rumors.
The writers here at PokerNewsCasino are not experts in market forces, but we do know the online gambling industry. Two weeks ago, editor Jonny Vincent wrote about PartyGaming’s Bright Future, mentioning there was wide speculation that PartyGaming was under-valued. PartyGaming was trading at 31p at time of writing.
Following the spectacular rise to over 45p on Wednesday, PartyGaming steadied today, closing at 40p after almost 150 million shares were traded in the day. Expect heated action in the 4 or 5 trading days leading up to their annual trading report on March 1.