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WPT Hasn't Left The Table Yet


Americans have poker fever -- and the stock of WPT Enterprises (WPTE), creator of the popular TV program World Poker Tour, based on a series of high-stakes poker tournaments, has been sizzling, racing up from 8 a year ago to 17.75 by July 7, 2005. The next day, it jumped to 26.50 -- when famed poker player Doyle Brunson and an investor group offered to buy WPT, 62% owned by Lakes Entertainment, for $700 million, or 31 a share. (WPT was featured in this column on Nov. 22, 2004, at 10.52 a share.) That offer has expired: Brunson gave WPT only a week to accept and didn't provide details about his bid, and the stock fell to 21, where it trades now.

But it's still in play, says Traci Mangini of ThinkEquity Partners. And David Bain of securities firm Merriman Curhan Ford (MEM), who tags WPT a buy, says rumors are Brunson and WPT are still talking. Mangini says foreign gaming firms big on Internet gambling would be among the other suitors. She expects WPT to be a major player in the $2 billion online poker market. It launched online wagering in Britain on July 3, taking bets from Asia and Europe. (It's illegal for U.S.-based companies to take Web wagers in the U.S.). Bain expects WPT earnings of 20 cents a share in 2005 and 65 cents in 2006. Brunson couldn't be reached. WPT didn't return calls.

Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

By Gene G. Marcial


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