The Stocks of Shuffle Master Slide Down After Downgrade

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The shares of Shuffle Master slid down after analyst Joel Simkin downgraded their ratings. One of the reasons is that the competition is edging out Shuffle Master in the Macau market.

On April 11th, 2007, stocks of Shuffle Master Incorporated slid down after an analyst played down the manufacture of automatic card shuffling and automatic casino chip sorters due to stiff competition from rivals in Macau. An analyst from Prudential Equity Group Joel H. Simkins lowered his rating of the company from a “Overweight” to a “Neutral” and cut the price target about 2 dollars a share because he has some doubts on Shuffle Master’s electronic table games in Macau.

Simkins said that during their visit they became concerned that some of the rivals of the company like Interblock, PacificNet and Aruze have succeeded in the electronic roulette/baccarat/Sic-Bo division compared to the Stargame division of Shuffle Master.

Simkins added that the Stargame division of Shuffle Master is continuing to lose its market hold in Macau to Aristocrat, International Game Technology, WMS Industries Incorporated and Bally Technologies.

Simkins said that although the operators said the slot machines of Stargames used to be at the top of their level, they are concerned about the underinvestment for the content during the last two years and aired their concerns that the brand should be relaunched especially with the growing environment.

Shares for Shuffle Master slid down to about 49 cents per share or about 2.7% percent to $17.41. Shuffle Master’s stock has been trading in the market for about 52 weeks at about 16.50 dollars to 40.75 dollars.


 

14 November 2007

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