Investors ante up for piece of budding poker empire's hand.LAST week, Steven Lipscomb, president of WPT WPT World Poker Tour WPT Waypoint WPT Wisconsin Public Television WPT Watson Poker Tour WPT Wonderlic Personnel Test WPT Wavelet Packet Transform WPT Wireless Power Transmission WPT Windfall Profit WPT Wireless Personal Terminal WPT Word Processing Technician Enterprises Inc., described his gaming company in a conference call with analysts as "a little poker Disney." Never mind that West Hollywood-based WPT Enterprises, which produces the "World Poker Tour For the PBS network with the same abbreviation, see . The World Poker Tour (Abbreviated WPT) is a series of international poker tournaments featuring most of the world's professional players. " television programs for the Travel Channel, had just missed analysts' fourth-quarter earnings estimates. Or that its success is built on the potentially fleeting popularity of televised poker tournaments. WPT executives and its fans on Wall Street point out that the stock has nearly tripled in the past seven months, to almost $19 a share last week. With just nine employees and one key product, the "World Poker Tour" TV shows, WPT Enterprises sports a lofty market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. of $335 million. Nicholas Danna, KATE BERRY an equity research analyst at Sterne, Agee & Leach Inc., in Birmingham, Ala., said the WPT brand is "monetized" to sell all kinds of new products--though none has come to fruition. "You can compare them to anything from a mini-Walt Disney to Playboy Enterprises Playboy Enterprises, Inc. (NYSE: PLA), also organized as New Playboy, Inc. (NYSE: PLAA), is the company founded by Hugh Hefner to manage the Playboy magazine empire. It was created in 1953 as the HMH Publishing Co., Inc. to Marvel Comics," Danna said. "But it's the idea that if you brand something, it opens all sorts of different avenues." WPT Enterprises was spun out of another publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. , Lakes Entertainment Inc., based in Monnetonka, Minn., which retains a 66 percent stake. Lakes Entertainment, which manages the Grand Casino Coushatta in Kinder, La., spun off a 4 million-share stake in WVF WVF World Veterans Federation WVF Women's Venture Fund (New York) WVF Walnut Valley Festival WVF Wildlife Volunteer Fund WVF Westenholte Voorst en Frankhuis WVF Wikinger-Versand-Forum WVF Willow Vegetation Filter Enterprises last year, raising $32 million from the public. Its stake in WPT Enterprises has helped boost Lakes Entertainment's stock to above $16 last week, from below $3 in 2003. The company's 12.5 million shares stake in WPT Enterprises is worth $237 million. Insiders own 80 percent of the company. WPT Enterprises Chief Executive Lyle Berman Lyle Berman (born August 6, 1941 in Minneapolis, Minnesota) is a professional poker player and business executive. Business Berman grew up in Minnesota and attended the University of Minnesota where he graduated in 1964 with a degree in business administration. is chairman and chief executive of Lakes Entertainment. Berman came under criticism in 2000, when Rainforest Cafe Rainforest Cafe is a themed restaurant chain owned by Landry's Restaurants, Inc. of Houston, Texas. It was founded and created by entrepreneur Steven Schussler. Description , where he was chairman and chief executive, was being sold to another company he headed, Landry's Restaurants Landry's Restaurants, Inc. NYSE: LNY is an American corporation which is in the business of developing restaurants and hospitality projects, from Houston Texas. Inc. Several large shareholders objected to a provision in the sale that called for Rainforest to pay a $2 million fee to a unit of Lakes Entertainment. A proxy advisory firm advised institutional shareholders to reject the sale, but it ended up going through--and the fee was paid, prompting a shareholder lawsuit. Berman did not return calls. Televised poker Todd Steele, WPT Enterprises' chief financial officer, said the idea to create a poker tour came from Lipscomb, who produced and directed "On the Inside of the World Series of Poker The World Series of Poker is the largest set of poker tournaments in the world. It is held annually in Las Vegas, lasting just over a month. A bracelet is awarded to the winner of each of the fifty-plus events which include all the major varieties of poker. " for the Discovery Channel in 1999. Lipscomb was executive producer of "Cruisin' to a Million," for the Travel Channel, in which a poker tournament takes place on a cruise ship in the Mexican Riviera The Mexican Riviera refers collectively to several cities and resorts lying on the western coast of Mexico. Although there are large distances between these cities, they are often referred to as the Mexican Riviera because of their popularity among tourists. . Lipscomb came up with the idea of a branded poker tour. He also found a way to make the game more exciting for viewers with a so-called "WPT Cam," which films the face-down cards that players are holding. Viewers can follow the game, with play-by-play commentary from poker players and celebrity announcers. "World Poker Tour's" third season begins airing this month with 16 tournaments at various casinos from Las Vegas to Paris. Of the company's $10 million in annual revenues, 95 percent is generated from licensing television rights. Now Harrah's Entertainment Inc. and ESPN ESPN Entertainment and Sports Programming Network are fielding a competing televised poker tour. Looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. other growth areas, WPT Enterprises plans a second-quarter debut of an online gaming Web site, WPTonline.com. Bets would be prohibited in the U.S. but officials expect big demand from Latin America and Asia. "We've decided only to operate in jurisdictions where it is legal because the Department of Justice has put pressure on U.S. players for wagering online," said Steele. Last year, WPT Enterprises signed a deal with slot machine maker International Game Technology to create "World Poker Tour" poker machines, and a licensing agreement with video game maker Take-Two Interactive Software Inc. for interactive poker games. The online poker market is potentially $2 billion in size, said Danna, the analyst, noting, "If they can get 10 percent of that, then you're talking $60 million in revenue." WPT Enterprises Inc. [GRAPHIC OMITTED] YEAR (Jan. 2) 2005 2004 Revenue (millions) $17.6 $4.3 Total Expenses (millions) 16.9 4.6 Operating Income (millions) 0.7 (0.4) Net Income (millions) 0.8 (0.5) Earnings Per Share $0.04 ($0.04) SUMMARY Business: Television poker tournaments Headquarters: West Hollywood CEO: Lyle Berman Market Cap: $335 million Dividend Yield: None Total Liabilities: $4.9 million P/E Ratio: N/A * Long-Term Debt: $0 * Company is not profitable Staff reporter Kate Berry can be reached at (323) 549-5225, ext. 228, or at kberry@labusinessjournal.com. |
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