Cryptologic Puzzle - One Answer To The Riddle Of Where Cryptologic Is Heading Next. Take No Notice Of The Name: There Is No Logic In The way That Cryptologic Operates.
One answer to the riddle of where Cryptologic is heading next
Take no notice of the name: there is no logic in the way that Cryptologic operates. That's the conclusion some analysts have reached. Indeed, it's a puzzle to know in what direction the company is going. The company's stock price over the past year has seen a relentless if steady decline and analysts with stock picking skills are hardly going to recommend buying the stock.
It's true of course that stock picking skills today are in short supply. An executive from one investment house had this to say about it: "Any monkey could make money in the bull market, but it takes talent in a bear market."
Two decades of rising share prices and momentum investing has ended with a shortage of good people who have the talent and skill to pick winners. Even so, none of these is likely to pick Cryptologic on recovery prospects or even on fundamentals.
From a beginning in which the company was financed by a convicted criminal and drug dealer, to shady deals done under the aegis of organized crime, to software bugs where players were "frozen out" from further play if they won more than a certain amount, to complaints and legal action from licensees (one is suing Cryptologic for $ 800 million), to an investment in Sports.com, which cost the company nearly $ 10 million in write-down charges, all of which shows you are not exactly looking at a rosy investment for the future.
That could be why the stock has been falling over such a long period. The market may get it wrong sometimes but overall it is unerringly accurate when it comes to forecasting future prospects and profits. The puzzle is that online gambling is still growing fast both in popularity and numbers of players.
The market is of course maturing now and the free for all that once xisted online no longer obtains. Too many crooks in the beginning spoiled the market for many later entrants, such as the Russian oceangoing vessel that set up offshore, attracted thousands of players, and then sailed away with their deposits.
When the son of the famous London gambler and casino owner John Aspinall tried to set up a new casino online, despite being a new, listed company, debts of many millions soon piled up and put paid to the son's chances of making any money from gambling over the Internet.
World Gaming has also been trying to reinvent itself, with a new name, a new company, and a new location with headquarters in London. In the process, investors lost hundreds of millions of dollars when the company was known as Starnet, and they are unlikely to ever return with the same enthusiasm.
The answer to the puzzle may be that the market is anticipating a new entrant to the market, or a new company with the means, the experience, and the professional knowledge to offer the market what it wants. This would have to be a reliable company with sound economic potential, with a good name, with the ability to make a profit, and run by top people and honest, dedicated staff.
If the software arm of such a company could come up with some new games, not the same old stuff but next generation games of huge excitement and technical wizardry, above all honest and fair games, this new company could sweep all before it, emerging as the dominant force in the online gaming market for at least the next two decades. In fact, it could well stay at the top far longer than this, at least until someone reinvents the Internet.
This might explain the dismal performance of leading software developers like Cryptologic and World Gaming. A world player, waiting in the wings, could soon eclipse them.
