This one hit the markets running today. Despite negative publicity it was well supported so I jumped in for a small holding--anyone else joining in?? I am hoping for a good run up before the shorters get going.

friday prty closed at 1.07 this morning the opened at .40. If I had left say a stop loss at .90p would this have still worked even though they opened at .40p. I have never really understood how the system works. I have taken a real battering today on this one. I will haave to sit on these long tern now this has happened. Good luck to all of you.

Janet

sorry to hear of your loss

with regard to stop losses, if you had a normal stop loss then no it wouldnt have helped you as the price "gapped" past your stop. However, you are able to take a guaranteed stop out (you pay a little extra on the spread for this) and this would have exited you at whatever price you set it at

With regard to sitting on these long term, i would recommend revisiting the fundamentals and working out whether in light of the last few days whether they are good value at their current price. If not then i would look to sell and put your funds into a stock with a better outlook

JB .... as Fundy says unless it was guaranteed, then no, it would have made no difference as price was dumped to 40p at the opening and you would have been closed out at that price .... you will need to talk to your broker about guaranteed stops as just possible not available on all if the stock is considered too volatile or similar or only at a significant premium

80,000 is a very big position in my oppinion, I hope Janet, you didn't put all your eggs in one basket or do it through CFD. Given the P/E for the share is already very high on its own, close to 20 if I remember correctly and considering 80% to 90% of Party's revenue is generated from US market, I felt that it still have some more downtrend to follow. I would quickly close my position if I were you.

Here is how I value this share. (80% plunge in EPS), revised EPS = 20% x 6p = 1.2p.
P/E was previous 18, that is significantly higher than the FTSE average of 13. I doubt people would still be willing to pay for such a high P/E after knowing all these bad news. Say they will pay the industry average of 13, that would value the share at 16p or thereabout. Given whatever the price is now, 45p say. There is still quite a distant to fall.

Anyway, you can also bet the board will significantly expand the European market to counterweight the exposure to the US market and things could get brighter in a few years time, who knows?

Think the EPS could well be worse than that if they have to close all US accounts as they will have a much higher proportion of fixed costs in relation to the remaining turnover and gross profit (i say gross profit because im not convinced they will have a net profit). It will also put a lot of pressure on the balance sheet and gearing of the company.

I also wonder what short term effect is on cash flow position if all US players need the cash they have in their online accounts returned (hopefully this is ringfenced but i cant find anything that confirms this)

I have not thought of the cash flow problem, thanks for enlighting me. Oh well, I think it is just as bad a day for the board as it is for the investors.

They will probably be kicked out of FTSE100 the next time round much like Corus and other shares did. But Corus is doing brilliantly in FTSE250. Perhaps maybe when Party being demoted to FTSE250 only will I start considering buying it again.

Ms Bennison you have very deep pockets! Given your ownership of VOG,IOT,GOO,PRTY and the like I'm surprised you're still solvent. Do you trade on margin or just regular holdings?

Hey Janet - chin up gal - said one gal to another.
You're not the only one who's stuck still holding these, I'm another one and I am sure there are a lot more - there certainly were a lot admitting they were buying in when things were good! This one was always a big gamble, I've done well with it in the past but always knew it could be a disaster, it was a risk taken, profited from and now..well it's a case of wait and see. I certainly wont dump at this price but that's just IMHO, it's made up a few pence today - so far - we shall have to see.
:>)

stock* and JB .... far from convinced that continuing to hold is correct ...... i thought the market might deem the fall overdone this morning, but the recovery has not continued

Agreed Cynic but I'm not bailing right now, decision made rightly or wrongly.
That's not to say I wont bail out tomorrow, next day or next week but just not today.

Fundamentalist,

Re your post #140: I appreciate the sentiment behind your suggestion, but are you not somewhat spitting in the wind by telling JB to look at the fundamentals?

My point being that the red "no bathing" flags have been flying for weeks when it came to online gambling stocks and if they weren't a significant indication as to what might happen to the fundamentals, then I don't know what was.

JB, one sentence confirmed it all: "I have never really understood how the system works."

I really hope you can afford your losses; if you still feel inclined to invest, then perhaps you might be persuaded not to let the size of your investment outstrip your knowledge of the subject.

I am truly sorry that so many people have lost out this morning, but the warning signs were there.

Yours in something of a state of shock and awe.

Soul Traders.

ST

only trying to help in answer to a question

Fundy, I appreciate that, and didn't mean to cause anyone any offence. I apologise if offence was felt. You're right in what you say.

who needs friggin America...shareprice has fallen to this over emphasis on yankeeland...hundreds more countries to be in...the growth story has just begun

more maesto supreme rubbish ..... what's this guy on? .... methane overdose?

President Bush is costing me a bomb!

yes he cost me a bomb on 911 too...i wish i had his foresight to put a put option on airline stocks a couple of days before 911

cynic have a look in your email box. Please confirm you have received your mail.

maestro: Friggin America, as you put it, is needed because that's where the customers are. The fact that the U.S. is reinforcing its antiquated laws on 'wire' based gambling to protect its own huge and lucrative gaming industry is no different from the French fiddling with laws to keep British lamb and beef exports out.

The Americans may well be harnessing the righteous indignation of the minority vociferous religious right to the cause -- but that's no different to the French harnessing 'health concerns' to theirs to placate their vociferous and influential farmers.

Citywire. On-line gaming devastated as US plans to ban banks making payments

The signature of US president George Bush on a shock piece of legislation will effectively outlaw payments for on-line gaming and turn a booming industry into one of potential bust.

Big players like PartyGaming, Sportingbet and 888 Holdings have been rushed into issuing profit warnings and say they are likely to pull out of the US market which is where most of their income comes from.

All the shares were hit hard. Market leader PartyGaming saw its share price crash by over 60% before settling at 47.75p, down 59.375p or 55.49%.

On Saturday the US Congress approved The Safe Port Act which was passed to the House of Representatives and Senate which forwarded it to the White House for the president's signature which will make it law.

When passed, the act will simply make it illegal for banks and credit card companies to approve payments for on-line gambling sites.

Given that the US authorities have made their disapproval of on-line gaming clear with the arrest of Sportingbet chairman Peter Dicks in New York last month and BETonSports chief executive in Dallas in July, the president's signature is expected in the next two weeks.

Efforts to outlaw on-line gaming in the US have been getting nowhere fast. The Safe Port Act has caught the industry by surprise in that it doesn't outlaw on-line gaming, but prevents the participants from paying for it.

Provisions in the bill, in a section labelled the 'Unlawful Internet Gambling Enforcement Act of 2006', outlaw the processing of payments between US gamblers and on-line gaming companies.

Although the act makes unlawful the receipt by a gambling business of proceeds or money in connection with unlawful internet gambling, it does not clarify the definition of unlawful gambling.

But PartyGaming says that if the bill is signed it will be practically impossible for it to provide US residents with access to its real money poker and other real money gaming sites.

'If the President signs the act into law, PartyGaming will suspend all real money gaming business with US residents, and such suspension will continue indefinitely, subject to clarification of the interpretation and enforcement of US law and the impact on financial institutions of this and other related legislation' it says in a statement to the Stock Exchange.

Scott Longley, editor of Egaming Review said: Theres going to be no dead cat bounce on this one. This pussy is well and truly flattened'.

PartyGaming PR man John Shepherd shares Longleys pessimism: The measure outlaws the processing of payments between US customers and on-line gaming companies. It makes it practically impossible for us to provide any US resident with our real money online gaming service.

Sportingbet is more optimistic. It points out that its 'non-US international banking partners' will first have to determine whether the new act applies to them.

It also notes that the law explicitly exempts US gambling interests and it is seeking clarification as to the legality of this under US commitments to the World Trade General Agreement of Trade and Services.

But the stock market has assumed that the on-line gamblers will lose all their US revenues and has cut share prices by the percentage of business which comes from the USA.

Lumley reckons that PartyGaming will lose 60% of its business. He thinks 888, down from 146.5p to 95p, and Sportingbet, down from 184.25p to 79p, have similar percentage shares from the USA.

He says the percentage will be even higher for Leisure and Gaming, down more than two thirds from 38p to just 12p, and adds that World Gaming, down from 64p to 12.75p, is practically entirely US-based.

Of the larger on-line operators only Ladbrokes and William Hill have no US customers. William Hill shares were down 2p at 641.5p, while Ladbrokes was up 1.5p at 390.5p.

The big question now is whether other countries follow the US lead. And is there any sort of fight back in the US?

Longley claims that other European countries cant simply ban something which is perfectly legal in the UK, and says that EU law makes it hard to ban on-line gambling.

Both he and Shepherd claim that the Safe Port Act has been pushed through to protect US gambling monopolies including state lotteries, horse racing and Las Vegas.


Citywire verdict: Although the new act has caught the industry by surprise, the writing has been on the wall for sometime and the big players have been expanding outside the US as fast they as can.

As the US has always regulated gambling, the question has often been posed about how long it would allow a new bunch of web-based players near unlimited access to its wallets of its gambling addicted citizens?

The Safe Port Act doesn't outlaw gambling so much as they way it is paid for, so it will doubtless be challenged in the courts.

Although the moral standards may be duplicitous, given the strength of the Christian Right in the US and the countrys puritan past, it is difficult to imagine a successful legal challenge.