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11.10.2005 The British Guardian newspaper reports that shares in Empire Online, potentially the biggest loser from PartyGaming's "skins" decision, fell 34 percent. The newspaper says that only a month ago, when it received a takeover approach from Sportingbet, Empire (Empire Poker) was valued at over GBP 800 million; it is now worth GBP 350 million.
PartyGaming shed more than 11percent to hit a new low of 71p, almost 40 percent below its June flotation price.
Empire's statement this week that business had been flat over the past three months heightened market fears, first raised by PartyGaming's warning of a slowdown last month, that the online poker phenomenon may have peaked. Sportingbet, owner of Paradise Poker, lost 7 percent and freshly floated 888, which operates Pacific Poker, fell 11 percent.
Analysts remained optimistic regarding Empire, however saying that the market reaction did not accurately reflect the strong performance of some companies in the sector.
"There has been a setback in valuations, but I would anticipate companies being judged on performance metrics in the future," Greg Harris, analyst at Cannacord, said. Paul Leyland, leisure analyst at Seymour Pierce said he felt Empire was overvalued, but the share price fall was for the wrong reasons. "Empire has more than enough players to survive on its own," Leyland said.
Analysts at Numis echoed the view of Empire's strengths in marketing.
"Empire's increasingly diversified operating model and its core marketing and distribution skills remain attractive and will underpin the group's continuing future success," the Numis research note added.
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