Bad Beat for Poker Skins on the London Stock Exchange

by Lou on November 17, 2005

Stock analysts in London recently took the view that poker skins do not actually “own” their customer base. This had the effect of reducing share value, and placing skin owners in the position of owning companies that are probably not be as valuable as they thought.

Empire Online, which derives much of its income from Empirepoker.com, had been negotiating a sale to Sportingbet, a leading online gaming operator. Sportingbet was planning to purchase Empire for £790 million when the deal collapsed when London market analysts stated that the customer base belonged more to Party Gaming, the skin provider, than to Empire.

According to one analyst, “All that was being offered for almost £800 million was about 16 employees and a marketing war.” He went on to say that, “Empire offers an excellent marketing team, but it does not control its own customers.”

The collapse of that deal reduced Empire’s share price by 20 percent in one day. For other poker skin operators the message is clear: Even with a healthy revenue stream, their operations are overvalued because their revenue flow is controlled by other gaming companies.

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