@Paul, That would explain the Rights offering vs. RS so that Management could secure a larger % of the total shares issued. They could have never aquired teh same % of shares in teh open market without triggering a significant increase in PPS.
If it goes Private, that will surely trigger a lawsuit that Management purposly dragged feet/sabotaged company to force PPS down in order to gain majority control of company. I don't know if a case can be successfully argued for that, but it would be in the realm of possibility....and a huge disappointment.
EGT recognizes revenue of gaming products upon delivery to customer City of Dreams Manila had a soft opening on 12/14/14/, so I would imagine that all revenue would be recognized in 4Q2014. How much revenue has EGT generated for Gamin Products that was not tied directly/indirectly in some way to the Ho or Packer families or Melco? Can EGT survive on the table scraps of MPL without winning other significant contracts?
EPS is based on EARNINGS not gross dollars. City of Dreams Manila is a $3.3M contract (gross dollars). How much of that is profit? 50%? 40%? 30%? 20%?
Regardless of the bump in cash that this one event will result in, I do not think that it will be enough to warrant a 2x+ in the current PPS. Pump n Dump aside, sustained growth in PPS is based on increases in ongoing revenue. EGT has not demonstrated that they can operate a significantly profitable stand-alone Dreamland boutique casino. The expectation that every Dreamland boutique casinos will be another NAGA is naive. Naga has a protected territory and is located in a large metropolitan city. Dreamland casinos were border town casinos with significant competition. Even the Slot Hall in the T.B. Highland resort is for the most part - a poor performer. Dreamland has learned that "Field of Dreams" is just a story...just because you build it, does not mean that they will come.
The NAGA contract, EGT's single most significant revenue stream, comes up for renewal relatively soon. I expect the contract to be much more expensive and the competitive bidding to be significantly stronger that it was for the existing contract because EGT has demonstrated the value of the contract over the past few years. There are large competitors active in these markets that were not interested in SE Asia when EGT won the current NAGA contract. A competitor could overbid the contract to win it knowing that winning the NAGA contract will also KILL a regional competitor (EGT) all at the same time.
Management could not have purchased the # of shares in teh open market as they bought in the Rights Offering (avg daily vol 26K)
A reverse split is cash neutral and the percentage of shares that they own will not change
With EGT stilling around .50 for months with no new revenue drivers announced, a RS seems to be the only way EGT can stay listed on the NASDAQ. I do not think that you will see that announcement until they report in March. Hopefully management will be able to maintain a +1.00 PPS after the 1:4/ 1:5 RS....they didn't the last time, but maybe now that they have more skin in the game, they will do a better job.
They have done qa good job at eliminating debt, but a poor job of bring in new revenue streams that have an impact on the bottom line. "giving away" a casino to a Govorner's wife may make good political sense, but it sose shareholders no good to lose that money when there is nothing to replace it.
We have a deadline. We will just have to wait and see how Management chooses to deal ith it and how well they communicate their decision to the shareholders - not something that they have done well in the past.
When will EGT go above 1$? Any one know how much cash does EGT have currently?
Why did the Insiders buy so much during the rights offering? Do they think they have a plan to grow this company?
Whats in your mind.. Please share here...
Sentiment: Strong Buy
Has EGT made a Triple Bottom? Will EGT Rally... Quarterly report will come on March 10th 2015. MCL Phillipines is opening in February. I hope the Chips Delivery is complete. I hope to see a bump higher in the total revenue for 4Q 2014. Any coments? Any Thoughts?
I believe the Naga Contract will be renewed.
Sentiment: Strong Buy
We are quickly aproaching the 60 day countdown to delisting.
If things don't quickly change significantly, I am guessing that Management will be forced to do another 1:4 reverse split. That is a Cash neutral transaction will reduce the Outstanding share count to 7.525 M and increase the PPS of 1.75-2.00 getting EGT out of the NASDAQ crosshairs. Expect the PPS to fall afterwards to ~1.50 because a reverse splits signals a weak company, TWO reverse splits is a sign of a desparate company.
On the plus side, given that extremely low outstanding share count and associated float, EGT will finally be able to generate an interesting EPS which will hopefully get the attention of Wall Street investors. If that happens and volume picks up, the low float will cause the PPS to move on low volume (Pump and Dump schemes could really move this stock). Then it is just a matter of generating NEW and profitable revenue streams and locking in NAGA for another contract to hold on to those PPS gains. If they can do all that, then this company has a future. If not? Not.
My point is that 0200hk has owned significant share % of EGT for years and has not done much to drive the PPS.
2014 is in the books and we will find out what happens with delisting around the same time we get a final Report Card on EGT's 2014 performance.
Melco's City of Creams in Manila will open next year and we will have the answer to the question of is EGT involved with that project in any way? (no EGT-Melco contract for EGM management has been announced, we might ). Chinese New Year is 2/19/2015.
From Melco PR ....
"Melco Crown chairman Lawrence Ho said City of Dreams Manila, the second of four resort-casinos in Entertainment City, would have a soft opening next month and a grand launch before the Chinese New Year next year.
“We are excited about the imminent opening of City of Dreams Manila. We are planning on opening the doors to customers in December for a sneak peak of what the property has to offer before a grand opening prior to Chinese New Year in 2015,” Ho said."
IGT is supplying the EGMs to Melco City of Dreams...
Casino equipment supplier International Game Technology says it will equip the City of Dreams Manila casino-resort.
The company says it will supply the City of Dreams Manila with IGT Advantage systems, sbX Floor Manager and Service Window, Xtra Credit, Point Play, Scheduled Return Play, Carded Lucky Time and Message Blast.
IGT will also supply the Philippine casino-resort with IGT Tournament Manager and with 52 video poker machines.
Mocha is not wholly owned by Melco..
Mocha is owned by Melco Crown (MPEL). MPEL is owned 50% by 0200hk and 50% by Crown. Thus Melco (0200hk) owns 50% of Mocha Clubs.
0200hk owns 65% EGT (and with Chung/directors ~ 75%).
I think Melco (0200hk) owns a larger percentage ownership of EGT than any of its other gaming jv's/subsidiaries.
I think something needs to be clear here. EGT is part of the Melco group (0200.HK) as oppose to MPEL which is a equal joint operation between Melco and Crown. Since the guys running MPEL and Crown already have good experience in running slot clubs, I don't see any reason to share a bit of the pie with EGT.
I originally think the grand plan was to build up EGT as a player in the small casinos throughout South East Asia then sell it to the MPEL partnership. You've got to give Clarence some credit that he tried but unfortunately it didn't turn out well. It's a shame that they offloaded the casino equipment business when in reality there was some potential there due to the boom in new casinos in the area. I remember when I visited one of their Macau game shows and they displayed quite an array of equipment from own branded slot machines, card shufflers, chips etc. So I think since they still have the hands in the chips business it would be really easy to go back to the equipments field when there is a lot of recurring business.
I think that we diverge at one particular fork in the road....
Since none of the business fundamentals have changed (no new contracts, no new Dreamland Casino locations, or new RFID products), I look at past performance as an indicator of future performance. because they have a zero investoemnt in EGT the opportunity for profit was even greater than if that have the current nominal PPS investment.
Other than the iHub led Pump n Dump, the PPS has not moved significantly UPward in YEARS, however we ARE currently at multi-year LOWS (~.11 PPS pre-split)..that is not ALL TIME low but close enough for me to believe that Melco thinks of EGT as something that they would rather scrape off the bottom of their shoe as opposed to growing the company in any significant way. I fear that EGT is nothing more than a tax offset for Melco.
We don't have long to wait. They have 3 months to double the current PPS or announce another Reverse Split if they want to keep the company off the pink sheets. We will know their plans about the same time that the 2014 10K is released.
Greener pastures in 2015
Probably do not know any more than you, but the shares they owned BEFORE cost zilch. The recent offering shares were out of pocket $. Big dif.
Of course they care re the PPS. When 0200hk/Clarence decided the only option to save/succeed was via the rights offering it was to the benefit of any participating to have the price as low as possible.
I did not participate in the offering. I guess that tells you the faith I have in the management team. Remains to be seen what plans the parent company has for egt. THAT will dictate the future.
Happy Holidays to you and yours
Well...that 16M essentially doubled their position. It is cheaper to buy shares than to give EGT another loan.
Care to explain why the chariman/direcors didn't seem to give a rat's #$%$ about the 16M worth of shares that they already had BEFORE the shelf offering?
Why should doubling down be the herald that they all of a sudden give a damn about the PPS?
I used to believe inn this Management team, time has taught me to think otherwise.
Egt's major shareholder and chairman/directors, who just plunked down 16Mil combined, must not share your concerns.
The same group as of the rights offering closing owns ~ 75% of the pie. 0200hk has a history of doing most ( ? all) of their projects as some type of jv. What happens from here ? Clarence alone has not been able to make it happen. Will Lawrence and the 0200hk 'machine' make IT happen ? is THE relevant question.
To avoid selisting, EGT must be over 1.00/sh by this date and STAY above 1.00 for the next 10 consecutive trading days (see below). It would be nice if they didn't wait until the very last minute to meet listing compliance, but considering the minimal conversation and dismissive attitude about this very important shareholder issue, I would not be suprised to see Cinderella Chung sitting on top of a broken reverse-split pumpkin @ midnight on 4/13/2015. I would LOVE to be wrong, but history says otherwise.
HONG KONG, Oct. 17, 2014 /PRNewswire/ -- Entertainment Gaming Asia Inc. (EGT) ("Entertainment Gaming Asia" or "the Company"), a gaming company focused on emerging gaming markets in Pan-Asia, today announced that on October 15, 2014, the Company was notified by The NASDAQ Stock Market LLC ("NASDAQ") that it has granted the Company an additional 180-day grace period, or until April 13, 2015, to regain compliance with the minimum $1.00 bid price per share listing requirement. The determination was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on The NASDAQ Capital Market with the exception of the bid price requirement, and the Company's intent to cure the deficiency during the second compliance grace period by effecting a reverse stock split, if necessary.
According to the notification, if at any time during the second 180-day grace period, the minimum closing bid price per share of the Company's common stock closes at or above $1.00 for a period of ten consecutive business days, the Company will regain compliance and the matter will be closed. If the Company fails to regain compliance by the end of the second 180-day grace period, the Company's common stock will be subject to delisting by NASDAQ.
EGT CEO is the CEO Of the Manila subsidiary of MPEL. Why do you think I said our CEO is working for MPEL instead of us.
Hey Ihub, nice to have you back. NOT!