Is World Poker Tour Stock Worth the Gamble?Published November 6, 2008 by OCR Editor
World Poker Tour Enterprises (WPTE) is responsible for the World Poker Tour among others. Its stock is currently in the doldrums, but is now a good time to buy?
Poker players are quite familiar with the World Poker Tour, but how many would be interested in buying the stock of its holding company?
From highs of $24 per share before the release of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, shareholders in World Poker Tour Enterprises (WPTE) have seen their stock sink to under $1 in value. Should the stockholders cut their losses, or is now the time to expect a recovery?
TV to the rescue
At the end of 2007, WPTE launched an upgraded version of their poker site, which was well received at the time. The company's earlier software platform had caused a series of technical problems and had to be replaced. However, a significant proportion of the company's revenue is generated from US TV licensing for shows including the World Poker Tour and the Pro Poker Tour. WPTE are banking on these TV deals to support their revamped poker website, which is where future potential profit growth is being anticipated.
The current WPTE stock doldrums are largely attributed to the post-UIGEA aftermath, although powerful voices in Congress are attempting to overturn the legislation. US chairman of the Senate finance committee Barney Frank is currently pushing to repeal what he called one of the "stupidest laws" ever passed.
Further encouragement for WPTE shareholders came when New York senator Al D'Amato was appointed to the chair of the Poker Players Alliance. This group represents 0ver 100,000 American poker players and is currently pushing for regulation and control of online poker in the US rather than the effective ban that the UIGEA legislation left in its wake.