Bwin.party Shares Struggling Despite Full Tilt Poker, UB/AP Woes

Published on August 4th, 2011 4:09 pm EST

It's now been over 3 1/2 months since "Black Friday".

During that time, the online poker industry has undergone a seismic shift. Full Tilt Poker is currently closed to the entire world as the company desperately tries to secure an investment. UB/AP, once one of the largest online poker rooms in the world, is running on fumes.

It's a new world right now. Thanks to the troubles at Full Tilt and UB/AP, Party Poker is currently the second largest poker room in the world, behind only Pokerstars.

With two of their major competitors in critical condition, you would think that shares of bwin.party would be surging.

In fact, it's the exact opposite.

The day before "Black Friday" changed the online poker industry forever, shares of bwin.party closed at 131.00 on the London Stock Exchange.

In the first day of trading after "Black Friday", shares of bwin.party (BPTY on the LSE) closed at 170.00. In the following days, BPTY would trade as high as 178.80.

In the days following "Black Friday", there were legitimate worries that Pokerstars, Full Tilt Poker and UB/AP would never reopen. Rooms like Party Poker wasted no time in rolling out lucrative promotions to entice players living outside of the United States. There were even rumblings that Party Poker would soon regain the title of largest online poker room in the world that it had lost after pulling out of the United States in 2006.

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Shares of bwin.party closed at 116.90 today on the London Stock Exchange. The stock set a new 52 week low today, and is now just a hair away from reaching a new all-time low (the company went public back in 2006).

So, despite the fact that two of their largest competitors are now on life support, and despite the fact that Party Poker is now the second largest online poker room in the world, shares of the company are now down over 10% from their pre-"Black Friday" levels.

That's pretty horrible.

So what is going on?

To start, Pokerstars quickly righted their ship after "Black Friday". The company communicated frequently with their customers (other rooms could learn something here), and they quickly paid back their US players.

The result? Confidence in the Pokerstars brand was maintained, and Pokerstars reaped the benefits as a result. According to Pokerscout.com, traffic at Pokerstars is only down 4% year-over-year. That's pretty ridiculous when you consider the fact that they are no longer servicing US players.

As a matter of fact, Pokerstars currently has three of the top seven online poker rooms in the world (Pokerstars.com #1, Pokerstars.it #4 and Pokerstars.fr #7).

Party Poker, on the other hand, is up just 21% over last year. That's pretty disappointing growth when you consider the events of the past few months. It's safe to say that most people were expecting that the room would double or even triple in size after "Black Friday".

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Other issues, including proposed new gambling rules in Germany and worries over the eurozone debt crisis, have helped to bog down shares of bwin.party over the past few months.

It will be interesting to see how the company performs over the next 12 months, but you can't help but feel that they have missed out on a massive opportunity.

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Filed Under: Online Poker Rooms