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WPT helped start the poker phenomenon in March 2003, when the World Poker Tour debuted on the Travel Channel.
Poker games like Texas Hold 'Em had always been hard to follow on TV, but WPT got viewers involved in the action by creating graphics that revealed the players' hole cards and their odds of winning. The series is among the most popular poker shows despite growing competition.
WPT's shares hit a 52-week low of $5.94 on Tuesday, dragged down in part by fears that the global poker craze had peaked, and closed at $6.96 on Friday, down 64 cents. The company went public in August 2004 at $8 a share.
The stock has been on a wild ride since July 8, when it rocketed 49% to a record $26.50 as investors reacted to a sketchy takeover offer from a group fronted by poker legend Doyle "Texas Dolly" Brunson.
One analyst likened the $29-a-share bid to "getting a napkin with an offer scribbled on it through your fax machine." WPT called the law firm whose letterhead was on the offer, but the firm said the next day that it no longer represented the Brunson group. WPT's board let the bid expire July 12, but the episode raised eyebrows among investors. The stock's price gradually dropped to well below where it had been before the offer. David Bain, managing director at Merriman Curhan Ford & Co., a securities firm in Los Angeles, expects WPT's strategy of negotiating exclusive advertising deals for the website with the poker tour's broadcast partners to pay off in 2006, when the revenue from these deals ramps up. Since the site's first commercials started airing in early November on Britain's ITV4, its traffic has surged, he said, with as many as 400 players during Europe's evening hours. That's a pittance next to industry leader PartyPoker.com's 80,000 players at prime time, but a promising beginning for WPT considering its later start online. Lipscomb said WPT would be "very pleased with 1,000 to 2,000 concurrent users" in 12 to 18 months, a target Bain called conservative. Bain expects WPT, which went public in 2004, to swing to a profit of 37 cents a share next year. WPT's revenue now comes mostly from producing the TV show and selling its overseas rights, as well as licensing products such as clothing and electronic games. Other analysts see WPT's stock as no bargain. Ivan Feinseth of New York investment advisory firm Matrix USA said he wondered why anyone would own the stock. Pointing to the company's unprofitable track record, he said WPT's believers reminded him of a Warren E. Buffett investing maxim. "There's a patsy in every poker game," Feinseth said, paraphrasing the billionaire, "and if you don't know who the patsy is, you can assume it's you."