Everest Poker Drags GigaMedia Shares To New 52 Week LowDecember 24, 2009 10:05 am
GigaMedia, provider of gaming software and services to the online gaming industry, has released its second and third quarter results which show a marked decrease in its revenue. The company has now seen its combined Q2 and Q3 net income, decline dramatically from $23.2 million in 2008 to a $2.3 million loss in 2009.
GigaMedia have said that Everest Poker had a big responsibility in pulling the company down to its $2.4million loss in Q3, as revenues declined in its poker and casino arm by 26%. The company has tried to stabilise this situation, and last week announced a deal with Mangas Gaming, who plan to buy out Everest in early 2010 as part of a $100 million deal, whilst GigaMedia will still maintain the option to buy back Everest Gaming in 2013 if it deems it viable.
Taken as a whole, the results make grim reading, and this was reflected in GigaMedia’s share price, which at one stage in the past year were trading at $ 7.73, but have since fallen and hit a new 52 week low on Dec 23rd at $ 3.04.
As the troubling results were announced, GigaMedia chief executive Arthur Wang tried to downplay concerns and strike an optimistic note going forward. He commented:
“We faced tough market conditions and strong operating challenges in the second and third quarters in our gambling software and our Asian online games businesses – and did not respond as well as we should. We were successful, however, in forging a powerful strategic alliance in Europe which we believe will be very value creative – and as a side benefit, free up management time and financial firepower for our planned expansion in Asia.”