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For anyone who does not subscribe, here is the latest from IGP:
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INTERNET GAMING PERSPECTIVE
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Wednesday ~ February 24, 1999
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A Commentary on the Present State of the Internet Gaming Industry
Some of you may have been wondering why there have been fewer issues of IGP being released in the last month then there had been. Our original intention was to make IGP a BI-monthly (twice monthly) e-zine. That is why it is stated so on our website, www.igp.nu . Starting the last week of November, we began to see the first stages of investor curiosity with this industry. Companies like GGNC, GLCCF, SNMM and WINR began to see tremendous movement that marked the first true returns on their stocks since their going public. GGNC was $.15 in mid November, only to jump as high as $6 the Monday after thanksgiving. GLCCF went as high as $25 in that same period. Certainly, as is with all of the Internet Stocks, they swiftly fell to more reasonable levels after shocked investors took profits that were beyond anything they could have imagined. Were there any fundamental reasons that caused these jumps? No. Just an incredible sense of what this industry will offer in the next 3-5 years. Because the industry is so new, and no one knew much about it, everyone jumped on the stocks that were moving. Companies were issuing press releases by the minute, as all wanted to ride the wave of investment madness. As Jimmy Durante used to say, "Everybody wants to get into the act!" Certainly, there is nothing wrong with that. However, in dealing with an industry such as this where the majority of the companies are not fully reporting, there is not much to go on in terms of financials and accurate numbers. An investor is left to
take a "crap shoot" at what he/she hopes will make some quick money. And that is where we have been- in the SHORT TERM investing of Internet Gaming. We could have issued an issue of IGP everyday- and many times we did- due to the market activity that was taking place in this industry. It is what I call the "What the Heck" principle. If a stock is selling for anywhere under $1 a share, an investor can buy 1,000 shares for $1,000. In the case of GGNC, investors were buying 10,000 or even 20,000 shares at $.15 a share. In essence, the attitude among investors was, "What the Heck- even if I lose half
of my money, that is only about $1,500." The risk factor- regardless of the infancy of the industry- was very low. The upside potential was EXTREMELY high. As it turned out- investors made millions in a few short weeks.
Since then, we have seen some modest, if not steady gains in the industry. However, share prices are more expensive now. GGNC is hovering around the $2.50 range; SNMM is hovering around the $4 range and so forth. Certainly, the "What the Heck" attitude has waned due to the prices, and now the shift is to seek out those companies that are credible and have a long-term potential in this industry. Investors have also become more savvy and knowledgeable concerning Internet Gaming. They are no longer falling for HYPE, and are seeking solid companies where they can make a sound investment that will have
tremendous long-term value. This is why the stocks have been quiet. There has been no sell off, but there has been no big buying. Investors are sitting back and watching. If you got on board after the big buys in early December, our advice to you is to be diligent and carefully consider your investments. Below is a checklist of what you should be looking for when considering an investment.
1. Is the company fully reporting- or are intending to do so?
2. Do they offer a professional long-term business plan?
3. Does the company have a good investor relations department that answers your questions?
4. Do they have a sound marketing plan? If so, how much do they allocate to this plan as a percentage of their revenue?
5. Are there any customer complaints concerning payouts and/or problems with their server and/or software?
6. Do they release press releases containing HYPE, or are their releases credible and verifiable?
7. What is the make up of their management team? Does it consist of reputable individuals with backgrounds in investments, banking, gambling and computer skills? Do they offer a list of these individuals?
8. Is the company a member of the Interactive Gaming Council (IGC)?
If you cannot satisfactorily answer those questions, please be very careful. Question number eight is a good sign, though, that all of the other issues are most likely in order. The Interactive Gaming Council is the trade association for this industry. It consists of industry leaders who are dedicated to the establishment of this industry on a worldwide basis. Members adhere to a strict code of ethics, along with fair and responsible trade guidelines and practices to enhance consumer confidence. The IGC also serves as the
industry's public policy advocate and information clearinghouse. They work diligently with international governments and legislators in an effort to develop effective implementation, control and regulatory frameworks with the goal of bringing about the global legalization of Internet Gaming. For a list of IGC members, please visit their website at www.igcouncil.org .
The work that the IGC is doing is also the key to this industry's success. When and how this industry actually flourishes is contingent upon the legal issues that invariably will determine its future. The legal ambiguities that exist in the U.S. and other countries have naturally caused reservations on the part of investors. No one is going to invest a substantial amount of money
into an industry that is not "legal", yet. This is why credibility is
paramount in the effort to legalize/regulate Internet Gaming.
The Kly Bill, sponsored by U.S. Senator John Kyl, sought to ban all forms of Internet Gaming. However, the Justice Department issued a statement that the bill was "unenforceable" especially in the realm of global commerce. Though it passed the Senate, the House removed it from the final Budget Bill.
It is understandable that due to the incredible growth of the Internet, it is our first reaction to STOP something that we know little about for fear that it would be out of control once it has begun. But since the time of the first introduction of the Kyl Bill, international acceptance by consumers and governments has risen sharply, and so much more is known. I believe that it is inevitable that we shall see legalization of this industry, but with a strict
international regulatory code that will ensure protection of minors, addicts, as well as the necessary taxation that will entice governmental bodies to adopt this industry. Three years ago, nothing was known of Internet Gaming. There was no framework for its structure. The time in which we are now is being used to bring forth that structure. Granted, during this early time, there have been many companies that are not reputable and have sought a quick fortune with no long-term intentions. But as is the case with anything, there
is always the good and the bad. It is not hard to find the good here.
E-Commerce is here! The Internet is real. Our economy is changing and moving toward global commerce. Listen very carefully- THE INTERNET GAMING INDUSTRY WILL BE ONE OF THE BIGGEST INDUSTRIES OF THE NEXT MILLENIUM. It is still early and there is plenty of time to invest. Understand that the shift has been moving to the Long-term, as opposed to the quick crapshoot. Use this time to find the companies that have a long-term business plan and seek to establish themselves within the industry in the next 3-5 years. If you do your due diligence, and stay away from stocks riddled with short traders, you
will be very happy in the next few years.
And that is the state of this industry. It is moving along well and is
looking more promising each day. The solid credible companies will soon emerge and take their positions at the starting line of this worldwide industry.
Until the next time. Happy Investing.
THE INFORMATION CONTAINED WITHIN THIS REPORT IS BELIEVED TO BE ACCURATE, HOWEVER NO GUARANTEES CAN BE MADE AS TO ITS ACCURACY. PLEASE CONSULT WITH A LICENSED FINANCIAL ADVISOR BEFORE MAKING ANY INVESTMENTS INTO THESE HIGHLY VOLATILE STOCKS.
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