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Non-Tech : Cryptologic (CRY/TSE): First Profitable Internet Casino
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To: arsene_lupin who wrote (849)3/6/1999 1:46:00 PM
From: DaveAu  Read Replies (2) of 2782
 
The management of this company has done an excellent job of building value in this company. They are focused on creating long term value and not on hyping the stock. Management holds over 50% of the equity in this company (mainly thru warrants exercisable at 50 cents) so it is very much in their interest to grow the company. I think this company has a lot of potential but it is also very high risk.

There's more to valuing a company than just looking at last year's PE ratio. While the price to earnings does seem ridiculously low, other measures such as price to sales do not. Investors are skeptical that the growth and margins can be maintained. Although Crypto was first out of the gate, there are a lot of competitors such as Starnet nipping at their heels. How many casinos are on the web now ? 1000 ? How many will there be in 5 or 10 years ?

I bought most of my shares after the Kyl bill was passed which devastated all the on-line gambling companies. That debacle is still fresh in everyone's mind and the threat of its return keeps a lot of investors away from these companies.

It's hard to compare Crypto to Starnet (I'm a shareholder in both) since Starnet has no significant earnings yet. Starnet is being hyped a lot more than Crypto but I wonder what will happen when it inevitably falls short of delivering growth as spectacular as the scammers would have us believe.

BJ
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