PartyGaming Encourages Investors To Keep Faith

PartyGaming took a heavy blow with the passage of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), but has spent most of 2007 climbing their way back. PRTY stocks steadily rose back to the mid-50's, but crashed last week as investors lost faith in a reversal of the UIGEA.


Barney Frank was expected to propose a complete repeal of the UIGEA, but instead the Massachusetts Congress, Chairman of the House Financial Services Committee, proposed new legislation to regulate and license Internet gambling in the US. While many involved in the industry remain optimistic of Frank's bill, investors in PartyGaming weren't among them.


Shares in PartyGaming sunk to 40p upon Frank's proposal and held steady until Mitch Garber, CEO of PartyGaming, himself sold 5 million shares at 39p. Garber's actions, combined with the guilty plea given to the DoJ by Stephen Lawrence, co-founder of NETeller, set an inevitable crash into motion.


Shares plummeted even further when investors weren't impressed by PartyGaming's announcement to cooperate with the US Attorney's Office concerning their involvement with the post-UIGEA US market. As the shares fell to nearly 30p, PartyGaming released a statement July 1, 2007, encouraging investors to keep the faith as prospects are still looking up and 2nd quarter financial performance was right on track with their expectations.


PartyGaming released this statement, "While the important fourth-quarter period lies ahead, the group remains confident about the prospects for the full year." To parallel this promising statement, PRTY shares rose to 33p.