That's $3.32220 per share. If the Stargames acquisition were a complete, total waste of money, the one-time loss would be $3.32220 per share. Someone interested in taking over SHFL might simply say, "OK, lower the price per share we were planning to offer by $3.32220."
Stargames costs can be broken down into 2 components.Direct costs and indirect costs.
Shfl paid diret costs of about $107M for stargames, and about $9m in indirect cost[ i.e. legal fees, loan fees etc.] for a total as of Feb/2006 of about $116M.
Since Feb 2006, Staregames has cost Shfl further multi tens of millions for the following":
1 ]At least $24M loss for the forced sale of the RDIF patents for the fire sale price of $16M it IGT. These patents were worth at least $40M.Shfl was forced to sell these patents to pay down part of the bridge loan or face foreclosure of the loan.
2 ]Interest on $70M balance of bridge loan at about 8% = $5.6M.
3 ]Loses from Stargames operations at 59 cents a share for 2006 = $20.65M
4 ] Legal fees, bank fees, points,and closing costs, and Shfl over head costs on the $100M line of credit need to pay off the bridge loan.Estimated $3.4M.
These indirect costs total about an additional $54M making the cost of Staregames to date of $170M
Additionally,Stargames continues to lose money.Accordingly, it is reasonable to add at least another $5M for Q1 for Stargames loses.
Therefore, the indirect costs for Stargames total $59M making the total cost of Stargames about $175M [ i.e $116M + $59M] or $5 a share.
Recognizing that Shfl is only worth about $3.75 a share on a value basis from the balance sheet, brings into very sharp focus the horiffic mistake in buying Stargames.
corticalchatter, I've never understood SHFL. The market dealt me--probably from a Shuffle Master shuffler!--a well-deserved, sudden loss in it: buy 600 at $25.05, sell 588 of them in a panic between $20 and $21 after the warning! That's what happens when I mess around with a stock about which I have doubt and confusion. (Unfortunately, it also happens too often with stocks about which I do not but probably should have doubt and confusion.) I kept 12 shares as a souvenir and an admission ticket to annual meetings, which are not inconveniently located for me. SHFL's price in six months? I have no idea, but with 12 shares I'll lose no sleep over it.