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It is definitely wishful thinking. But it is also logical thinking. Bally may only be looking at it for the lottery end of the equation. We haven't seen this technology explode onto the landscape because it has been tied up on a legal agreement with SciGames for 3 years. If the technology did not have value, why would SciGames want to own the rights to the technology for three years for the purpose of it not being rolled out?
What are the supposed connections you refer to?
Further evidence regarding the timing of an acquision
Great point!!! States will definitely look toward cashing in more on the voluntary tax of lotteries. They should like this card. I suspect Bally thought about that also
Follow up question to my post.....What is the expiration date of the lottery agreement EGMI has with I think Scientific Games where EGMI is getting $500k in fees for SG to just park the card on its shelves and do nothing? I know it is upcoming and that adds to circumstantial evidence of a takeover. I've seen the date posted on ihub before. Please update again. Thanks.
Glad you found post helpful. I've always found much of investing is trying to connect the dots of psychology. I believe I have connected the dots. Lets hope so and we will all be thrilled.
Can someone with a good relationship with Yvonne ask her if March 15 is accurate for the earnings call and please verify the date it was scheduled? Please post your reply to this board. If March 15 is accurate and was recently scheduled, then what I typed below may be highly relevant.
The plot thickens as March 15 is also the date they speak at the Roth Conference in Laguna, CA. EGMI is still listed as confirmed and scheduled for 11:30 AM. Bally Technologies is also listed as confirmed and scheduled for 12:00 and in the same conf room, thus immediately after EGMI on the same stage. Is this when they co-announce an acquisition? Being the larger company and the acquiror, Bally would issue the first press release. This is further circumstantial evidence for EGMI being acquired.
Furthermore, it is on a Monday and that is always the preferred day for merger announcements.
Additionally, why would Roth schedule EGMI to have the absolute prime time slot of 11:30? Companies never want the pre-9AM slots or the last slot of the day. Below is the list of companies presenting and their market caps. Why would EGMI get such a strong lead-in? It is sandwiched after two $multi-billion market caps and before two $multi-billion market caps. Most importantly, it precedes Bally and that makes it very easy for Bally to claim the EGMI slot to do a major presentation and then to introduce EGMI to the investor audience.
8 am EGT 30 mil
GCA 537 mil
SHFL 451 mil
MGAM 127 mil
ASCA 877 mil
KNM 2.4B
WMS 2.2B
EGMI 62 mil
BYI 2.3B
IGT 5.2B
GMTC 21 mil
CRYP NA
CNTY 59 mil
HYC 194 mil
TUC 141 mil
4:30 pm AAIR 58 mil
If we had a cataclysmic disaster on our hands I suspect EGMI would have already canceled that conference presentation. Legitimate companies, like a Bally, like to make meaningful announcements at conferences because they have a critical mass of investors all in one location. It makes for a very efficient strategy of disseminating info and answering investor questions for the CFO and investor relations of Bally. Both mgmt teams can saunter over to the breakout session and answer questions together.
I see the March 15 earnings date as further circumstantial evidence for EGMI being taken over (see my prior postings). Maybe the accounting restatement was discovered by the Bally auditors (Deloitte) during due diligence. That is a far greater likelihood than the EGMI auditors making such a discovery. Afterall, EGMI auditors validated statements for the prior three years. What could have possibly have made such a rinky-dink auditor suddenly decide to look over the books again? Deloitte has an army of staffers in the US, UK and globally. Deloitte certainly will have read through the many definitive agreements that EGMI signed in 2009 and validated those are legally binding.
I suspect EGMI stock will never trade again if EGMI and Bally are working on an acquisition. If it opens for trading before the pre-March 15 announcement of an acquisition and the stock tanks and then it is announced that EGMI is acquired for $x.yz value, you can be sure every shareholder selling in that window of trading prior to an announcement will have a guaranteed legitimate lawsuit. Bally and EGMI won't allow this to open for trading and the SEC will agree with such rationale.
The emergence of additional lawsuits will likely drive a nominally higher acquisition price of EGMI. That is because Bally would factor in the cost of $ and time in defending such lawsuits and add that to whatever fair market value it offers to EGMI. That would be the case if the acquisition price is sub-$2.24 (52-week high). Above that price and I doubt Bally has any reason to worry about shareholder lawsuits. Those who traded shares due to radio silence by EGMI probably have no grounds for a lawsuit since all shareholders were on equal footing.
Perhaps my theory of an acquisition explains why cirQ has not happened. Maybe Bally told EGMI not to sign a definitive agreement with Poken. Maybe this is why there is no BoD announcements and no new CFO. Maybe Bally lawyers told EGMI and Yvonne to go on radio silence.
Feel free to copy to Yahoo. I rarely look at their Board and do not remember my ID and password. I can imagine the replies.
Acquisition Feedback Please: I don't follow EGMI as close as many of you, but do you think this may be a hint of EGMI being acquired. Not sure if this was ever posted on this board.
http://www.benzinga.com/press-releases/b93311/bally-technologies-acquires-%E2%80%98games4you%E2%80%99-team-to-join-its-global-game-developme
Bally Technologies, Inc. (NYSE: BYI), a leader in slots, video machines, and casino-management systems for the global gaming industry, today announced the acquisition of the employees previously with Scottsdale, Ariz.-based Games4you, L.L.C., a leading-edge supplier of gaming and engineering solutions for the casino gaming industry. The former Games4you team members are now full-time Bally employees based in Arizona.
The Games4you team is a strategic addition to Bally’s Games business, which includes reel-spinning slot machines, video slots, wide-area progressives, and Class II, lottery, and central-determination games and platforms.
The acquisition of Games4you’s team will extend Bally’s game-development capabilities and enable the Company to create even more cutting-edge game content for the global gaming industry. The Games4you team brings Bally a creative synergy of game developers, mathematicians, animators, graphic artists, illustrators, and media techs – many who have worked together for a number of years. They have extensive experience in creating both new intellectual property and identifying and licensing today’s most engaging brands to create standout games for casino operators.
“After seeing the power and innovation of Bally’s game-development team, we are ready to combine our strengths to bring hot games and cool solutions to the Bally portfolio,” said Dave Tucker, Managing Director/Owner of Games4you and now Director of Software Development at Bally. “The leadership team of Bally Technologies is bringing vision to the gaming industry, and we are excited to become a key part of building on the Company’s 78-year heritage of innovation.”
Jason Stage, Managing Director/Owner of Games4you and now Director of Software Development at Bally, added, “To truly bring the next generation of games to our industry, you must have the full power of a company with leading system and server-based technology, innovative game technology, a full IP library, strong financial resources, and a leadership team with vision to partner with…we have found that partner in Bally Technologies.”
Most of Games4you’s employees previously worked for Atronic Americas and Atronic International and formed Games4you after Atronic was acquired by Lottomatica Group and their Americas headquarters moved to Las Vegas, Nev. Bally has opened an office in Scottsdale for the Games4you team, augmenting Bally’s base of regional game-development centers in the Silicon Valley; southern California; Las Vegas and Reno, Nev.; and India.
“The addition of Games4you complements Bally’s award-winning global team of game content and hardware developers, and extends our ability to deliver the industry’s most compelling games,” said Gavin Isaacs, Chief Operating Officer of Bally Technologies. “Games4you’s proven experience in delivering cutting-edge games that delight players and drive revenue for casino operators will only strengthen Bally as a leading provider of creative and high-performing games.”
About Bally Technologies, Inc.
Below are the companies investments, as listed under other assets on the balance sheet. I thought that EGMI stated on the last conf call or in the 10Q that they planned to monetize such investments. Secondly below, is the conf call comments regarding monetizing these.
As of that conf call it sounded like so much was going so right. How could so much have gone so apparently wrong? Could they have been lying the whole time? I find that hard to believe in this day and age that anyone would risk the overwhelming likelihood of going to prison over blatant securities fraud. Perhaps this is a once in a lifetime cavalcade of bad events all hitting beginning with LS death. Unlikely yes, but crazier things have happened.
I am actually hoping we are only dealing with embezzlement. If so, we can recover because that would not call into question the business of gamecards, which SciGames thought were so good that they bought the license to just put it on their bookshelf so as not to disrupt their paper lottery cards. (I think it was SciGames)
7. Investments
As of September 30, 2009 and December 31, 2008 the company had investments in the following entities:
September 30,2009 December 31,2008
Prize Mobile Ltd $ 1,860,235 $ 1,860,235
XOGO Ltd 1,314,735 1,314,735
Rosario Technologies Ltd 4,537,500 2,572,500
Quiz Factory 375,000 500,000
DG2L Technologies - 250,000
Total Cost $ 8,087,470 $ 6,497,470
The company holds 19.61% of Prize Mobile and less than 10% of each of the respective privately held entities which approximates the company’s pro rata share of their underlying value. The company made these investments in technologies which are complimentary to its current technologies or has received stock from sale of other investments. It is not practicable to estimate the fair value of the Company’s investment in the common stock of these entities because of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs. However, management believes that the carrying amount of $8,087,470 was not impaired as of September 30, 2009.
2) The intended monetization of these investments as stated on the last conf call.
Richard Fetyko - Merriman Curhan Ford & Co. - Analyst
Great. And then lastly, perhaps we had an update on the investments on your balance sheet in some of the private companies with regards to monetizing some of those. Any update there, Lee?
Lee Cole - Electronic Game Card, Inc. - Board Member
Yes. As we've said previously, we're looking to monetize the whole investment sector by the middle of next year and we're in active negotiations on a very large portion of that at the moment. And then the other real sector of the investments is Prize Mobile, where their business is progressing nicely. They're in a very interesting space, which we think could be synergistic with us in some respect, and hopefully we'll get their mobile platform. They've got some good news with a couple of large carriers in Europe I hope is going to emerge soon. So yes, they're basically -- bottom line is we're still very confident of spending out of all our investments by the middle of next year and hopefully at a profit, but definitely not a loss.
You are correct on the diversification
1) Perhaps someone at the UK bank embezzled? Any idea what bank this was held at? Hopefully, a legitimate bank.
2) I think the conf call is in doubt for Thursday. It would be best for EGMI to have the call before the trade halt is lifted. That will enable rational minds to assess the situation and create a more efficient market.
3) Perhaps we are the victims of fraud here with sovereign. Maybe the bank account discrepancy was fraud. This is really bad news. However, maybe it is not so bad if we consider the technology is strong and he signed so many definitive agreements in 2009 with CHinaLot and Scientific Games, etc. Maybe this debacle will cause EGMI to allow itself to be acquired. KD has to realize that is the quickest way to make money on all of his options rather than the slow climb back up with meaningful earnings.
You may be dead on with those investments. I web searched those four investments a few weeks ago. Each of the four companies sounded awful and like worthless investments. If that is all this is then we should be ok. Although, I am sure when this starts trading again that it will trade lower with capitulation before stabilizing.
Tricadia: Does anyone know if they held shares three months prior or if these are all accumulated in the past three months?
Is Tricadia focused on such small stocks or is this perhaps a small fund within their organization that owns the shares?
What is the assets under mgmt at Tricadia?
Does Tricadia have a history of uncovering small gems?
Any chance you post post the text of their report?
Keep conference call expectations in check. It could be delayed again and again after that. KD is not going to allow a conf call to force him into signing an agreement that is not beneficial to EGMI. The party on the other side of the table also doesn't care about EGMI's upcoming conf call and will not allow themselves to have a deadline based on a conf call date.
Just a reminder of my exact post from a little while ago regarding signed agreements.
Notice last year's signed agreements.
IRVINE, CA /LONDON – December 4, 2009 - Electronic Game Card, Inc. (“EGC”) (OTCBB: EGMI), announced today that it has signed a worldwide licensing agreement with Bally Technologies, Inc. (“Bally”) (NYSE: BYI), a leading designer, manufacturer, operator and distributor of advanced gaming devices, systems and technology solutions. The licensing agreement provides EGC with an immediate increase to its library of games with well-known product from Bally IP brands.
NEW YORK, NY/LONDON – October 13, 2009 - Electronic Game Card, Inc. (OTCBB: EGMI) (“EGC”), announced today that it has signed a definitive agreement to partner with China LotSynergy Holdings Ltd. (“CLS”) to enter the Chinese lottery market.
NEW YORK, NY/LONDON – August 18, 2009 - Electronic Game Card, Inc. (OTCBB: EGMI) (“EGC”), announced today that it has signed a three-year license agreement with Seoul, Korea based Kellof, Inc. ("Kellof") for distribution of the Electronic GameCard™, Electronic iQuizCards™, and Electronic Edutainment PLAY Cards, into its South Korea clients and strategic affiliation with Borazone Co., Ltd. ("Borazone"). Company management expects the agreement, which contains yearly minimum royalty guarantees, to begin generating sales in the current year fourth quarter.
Electronic Game Card, Inc. Signs Agreement with SSD Company Limited of Japan to Launch Barcode Scanning Technology
NEW YORK, NY/LONDON – August 13, 2009 - Electronic Game Card, Inc. (OTCBB: EGMI) (“EGC”), announced today that it has completed a Definitive Agreement with SSD Company Limited (“SSD”); a privately held Japan based interactive technology company.
NEW YORK, NY/LONDON – June 30, 2009 - Electronic Game Card, Inc. (OTCBB: EGMI) (“EGC”), announced today that EGC has signed an Exclusive Sales Representative Agreement with the FMM-The Moscoe Group, a 52-year business partner with leading mass market retail clients across America, to sell EGC Interactive Entertainment and Education "Know-it-All QuizCards™" and "iQuizCards™" branded cards.
NEW YORK, NY/LONDON – February 5, 2009 - Electronic Game Card, Inc. (OTCBB: EGMI) (“EGC”), announced today that an important contractual milestone had been reached in the launch of the Native American business with the start of its five year distribution contract with Sovereign Game Cards, LLC.
Any idea if there was a change in manager of the fund holding the shares? Any idea how that fund did last year? Accurate answers to such questions could help us understand the drop in share price.
Considering the dramatic decline in share price from $1.40 to $1.00 at 1mil+ shares per day, they must have been the seller.
Fantastic post!!! Nice logic and research. Your comments and the comments from a different poster cause me to post the following that I've been thinking about for a week or so.
KD & Yvonne have been hammered on this board. When did we start to think they were so awful? It was when they started missing target dates for CFO, Board members, announcements, etc. Prior to that, I thought they were very good and really delivered a strong message. Yvonne is at the mercy of mgmt. Kevin seems to be too "with it" to have looked like such a bumbler.
Thus, I have been wondering if they are going to be acquired. No need to bring on a CFO or Board members if EGMI is in discussions. No need to complete an agreement with poken. No need to come out with additional branding with cirQ. The lottery game cards seem like a killer app. Why have they not been rolled out to more lottery agencies (or whatever that is called)? It is a revolutionary game changer for lotteries. I wonder if there is some beauracratic something or other that is holding back the rollout. I bought this stock solely for the lottery opportunity. I am hoping someone can ask on the conf call what the holdup is in the US with lottery?
Reply to Sweetie1516 post 9717 & Chancetosee post 9719
Sweetie1516. I encourage you to make postings of opinion, but please back them up with fact. Otherwise, your posting has no legitimacy. It is no different than a person stating "This stock is going to $10 because I just think it is." You are not helping us understand the company any better. If you have a negative thought, it may be helpful for all of us. Please tell us follow up your post with fact based answers to the following:
1. Explain your statement "messes up time after time".
2. Explain why game cards are a joke.
3. Why is the game card not a growth business?
Chancetosee post 9719
Your post was interesting and helpful. I missed the SEC filing you linked to for the original MOU with ChinaLot. I think that builds the case from my last posting. The filing you cite was made June 17, 2009. My post cites a signed agreement on Oct 13. This shows a kicking of the tires by both parties with an MOU and both parties making a decision that this was a mutually profitable business opportunity that is formalized with a signed agreement.
I do not know the answer to your valid questions regarding KD's Q3 cc comments. I can only speculate that he needs to put his best foot forward publicly, but he was adept enough to keep his private thoughts private, which was he always had one foot out the door. Hopefully we will all get clarity next week.
Maybe EGMI gave up the 60% of something that wasn't really selling very well. Maybe EGMI calculated how many units would need to be sold for them to recover the $500k investment and the the months or years that may take and decided it was not going to achieve the 40% ROE and 21% ROA they currently achieve. Perhaps KD and his team realized they have a huge pipeline of possibilities in their core business that this is not worth it. Maybe EGMI had enough exposure to poken's board and entire team that EGMI determined it did not want to partner with this management team for whatever reasons.
Maybe Poken type technology will be embedded in cell phones soon, thus this is not a sustainable business and a revenue stream that will die. If so, why bother even if it is a revenue stream for three or so years.
I don't know the answers to those questions, but I am wiling to project that EGMI's management team is older, more seasoned, knows the North American market better, and is more visionary than a team like poken whose founder appears youngish.
Evidence Clearly Points to EGMI Dropping the MOU
The more I think about it the more I have to trust EGMI management was the catalyst in ending its agreement with poken. EGMI was also likely the driver in doing a MOU and not a signed contract. The evidence is strong for this to be the case. EGMI signed other foreign agreements in 2009. None were MOU’s. All were legally binding and strongly imply future revenue streams for EGMI. Notice the word SIGNED in each official press release excerpts below. EGMI seems like a legit company that signs legit legally binding agreements will legit companies/entities. EGMI seems wise enough to sign agreements (MOU) that have substantial wiggle room with weaker companies (poken). http://www.electronicgamecard.com/Investors/PressCenter/2009Releases.aspx
IRVINE, CA /LONDON – December 4, 2009 - Electronic Game Card, Inc. (“EGC”) (OTCBB: EGMI), announced today that it has signed a worldwide licensing agreement with Bally Technologies, Inc. (“Bally”) (NYSE: BYI), a leading designer, manufacturer, operator and distributor of advanced gaming devices, systems and technology solutions. The licensing agreement provides EGC with an immediate increase to its library of games with well-known product from Bally IP brands.
NEW YORK, NY/LONDON – October 13, 2009 - Electronic Game Card, Inc. (OTCBB: EGMI) (“EGC”), announced today that it has signed a definitive agreement to partner with China LotSynergy Holdings Ltd. (“CLS”) to enter the Chinese lottery market.
NEW YORK, NY/LONDON – August 18, 2009 - Electronic Game Card, Inc. (OTCBB: EGMI) (“EGC”), announced today that it has signed a three-year license agreement with Seoul, Korea based Kellof, Inc. ("Kellof") for distribution of the Electronic GameCard™, Electronic iQuizCards™, and Electronic Edutainment PLAY Cards, into its South Korea clients and strategic affiliation with Borazone Co., Ltd. ("Borazone"). Company management expects the agreement, which contains yearly minimum royalty guarantees, to begin generating sales in the current year fourth quarter.
Electronic Game Card, Inc. Signs Agreement with SSD Company Limited of Japan to Launch Barcode Scanning Technology
NEW YORK, NY/LONDON – August 13, 2009 - Electronic Game Card, Inc. (OTCBB: EGMI) (“EGC”), announced today that it has completed a Definitive Agreement with SSD Company Limited (“SSD”); a privately held Japan based interactive technology company.
NEW YORK, NY/LONDON – June 30, 2009 - Electronic Game Card, Inc. (OTCBB: EGMI) (“EGC”), announced today that EGC has signed an Exclusive Sales Representative Agreement with the FMM-The Moscoe Group, a 52-year business partner with leading mass market retail clients across America, to sell EGC Interactive Entertainment and Education "Know-it-All QuizCards™" and "iQuizCards™" branded cards.
NEW YORK, NY/LONDON – February 5, 2009 - Electronic Game Card, Inc. (OTCBB: EGMI) (“EGC”), announced today that an important contractual milestone had been reached in the launch of the Native American business with the start of its five year distribution contract with Sovereign Game Cards, LLC.
Astute observation on the word choice of “progress”. Those words are vetted by lawyers and are a likely tacit implication that "all else is progressing". I am glad they are waiting a week to have a “progress” call. Management will have time to thoughtfully organize an update rather than have a reactionary call, that leaves investors unconvinced and tanks the stock further. This will help long term valuation.
Here are some thoughts to ponder
· Maybe EGMI was the catalyst for altering/canceling the MOU with poken. Maybe EGMI management wanted to keep it as an MOU so they could get out of the agreement if it was not a successful product.
· Maybe EGMI and Poken shared sales figures at Sundance and EGMI was not so pleased. Perhaps EGMI had cold feet heading into Sundance and got a gauge of Poken's success and decided it was not worth focusing on. EGMI only has 12 employees.
· How much did this poken agreement really matter to EGMI? It was not even a revenue stream. It was not part of the reiterated guidance from the Q3 earnings conf call.
· Poken was out of EGMI’s core product focus.
· Maybe poken is not so successful. Look at this link and see how many places sell it. http://www.poken.com/resellers. I don’t see the “Best Buy’s” or “Radio Shack’s” of foreign countries listed.
· Poken is not even reviewed on CNET, which seems like the place to be for new technologies. Search it and you get: No matching product found for "poken", did you mean "poker"?
· There are one or two five star reviews of poken on Amazon and not one other review (positive or negative). Maybe this concept won’t work anyhow.
· A source told me US sales of poken since the Jan 20 press release and after did not spike from Sundance. It had no impact. The media photos of celebrities/VIPs with the device were pics of obscure people except for Lil Wayne (I think he may be big). None of those people are the influencers EGMI hoped to capture. In fact, they are wannabees and how are you going to get buzz when you are associated with wannabees. If anything, that could repel interest in the product.
· Perhaps we should all be rejoicing we never invested in poken (except thru the $500k EGMI invested) and be thankful we invested in a highly volatile, but relatively strong microcap with a highly liquid stock. A company with $0.19 per share cash, $0.04 per share debt (and declining), $0.32 per share book value, ROE of 40%, ROA of 21%, an operating margin of 58%, and $13.6 million of NOLs.