Published on June 15th, 2005, 1:00 pm EST

It appears, barring any last minute regulatory snags, that Party Poker (PartyGaming) is set to go public within the next month on the London Stock exchange. Party Poker, upon flotation of the stock, is expected to fetch a value of between 8 to 10 billion dollars. Now, the question is: is this a sound long-term investment, or merely the opportunity for a good trade?

First off, let me say that no matter what, I believe that this IPO will be a great trade. I think it has a strong possibility of trading 30-50% higher from its opening price, short-term. As with any IPO though, watch the offering price level; if the stock sinks below the price at which the shares were offered at, abandon ship, cause it's going down.

Long term though? Party Poker has had a stranglehold on the industry for the last year or two, but there is plenty of competition out there. People cite Party Poker's incredible profit margins as a reason why the valuation will be so high, but will increased competition squeeze these margins? Will Party Poker be able to keep acquiring new players and revenue generators at their previous clip, or will they start to suffer from market saturation?

These questions will keep me from investing in Party Poker for the long-term, but as a short term trade, it will probably work out really well.


Filed Under: Online Poker Rooms

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