Good questions everyone. First, Lou, you bring up an excellent point that I did not consider. A good estimate, since we don't know the percentage of the total amount wagered that the deposits represent, would be 50% of the handle. Even with that or something less than that, the revenue stream is still large enough that once it has commenced, would warrant a stock price much higher than it is today. I could recalculate everything but just assume half of what I posted. Also remember that all of my assumptions were conservative.
Nittany, I think you bring up a good point about the second 4%. If the customer loses all of his money, then that means that he gets nothing in return so their is nothing to take a percentage of. However some win, some lose, some do nothing. So you might expect on average that maybe 50% of the people gambling will get at least all of their money back. That means that you just take the total amount wagered, no the net hold, apply the first 4% to the 100% of the total, and then apply the second 4% to only 50% of the total. You could do that calculation many ways given different assumptions, again, these are only back of the envelope calculations anyway. Also regarding the total # of shares outstanding, I got the 11 million from a research report on CFG's website, that info might be a little dated, but changing from 11 to 13 million or something else close to that will not have a big impact on the projections, the biggest impact comes from the top line, revenues.
E.M. I am not sure how currently the functionality that WINR provides is done. In the interview, Skinner does address that and says that currently, other people are charging 6% to process the transactions and he goes on to mention how WINR will be cheaper at 4%. This is a good area to clear up, I will also be doing some more DD this week to tie up these loose but very important ends.
I don't have any idea either when everything will be operational, but I think you can measure it in days rather than months. Skinner is in Europe, at least he was last week, and they are extremely tight lipped about everything. I am also hoping that once they are operational, WINR will become more of an open book that we can all scrutinize. |
