PartyGaming Confident About Full-Year Prospects
Online gaming company PartyGaming said it was confident about prospects for 2007 after the second-quarter financial performance met its expectations, sending its shares higher on Monday.
Shares in the company were up 5.7% at 33.04 pence, valuing PartyGaming at around 1.3 billion pounds ($2.6 billion).
"While the important fourth-quarter period lies ahead, the group remains confident about the prospects for the full year," PartyGaming said in a trading update ahead of its first-half results announcement on Aug. 29.
Broker Numis Securities raised its rating on the stock to "buy" from "hold" due to the recent share price weakness and kept its 12-month price target at 42p.
"The shares, in our view, will bounce up to the 35p-37p region over the coming weeks," Numis said in a note.
"However, if we start to get a pick-up in U.S. online gaming regulation news flow over the coming weeks (which is highly possible), then you will see these shares react strongly (up and down depending on the news)," Numis added.
PartyGaming said last month it had been in talks with U.S. authorities. The company is attempting to find out whether it could face prosecution for taking bets in the United States before last year's effective ban on Internet gambling.
The company said it had started talks with the Attorney's Office for the Southern District of New York and had been responding to requests for information.
PartyGaming, which stopped trading in the United States after the law was passed, said it was too early to assess the likelihood of any particular outcome.
The legality of Internet gambling in the United States was ambiguous for many years, but it was effectively banned last October when President George W. Bush signed legislation outlawing gaming financial transactions.