An introduction to CRY/TSE Soon CRYP/NASDAQAn introduction to CRY (updated 2000.03.03)
1. CryptoLogic Inc. is the leader in the growing online gaming industry, with more revenue and profit than any online gaming company.
2. CRY?s corporate website at https://www.cryptologic.com includes company info plus all press releases and financial statements. Frequently asked questions from investors are summarized at https://www.cryptologic.com/faq/faq_investor.html
3. Trades as CRY on the Toronto Stock Exchange, and expected on March 20, will also trade as CRYP on the Nasdaq National Market.
4. CRY closed today at C$61.10, for a market cap of C$950 mm (US$650 mm).
5. Weiss, Peck & Greer, an investment manager with $16 billion under management, has acquired 1.4 million shares in CRY, most recently buying 575,000 shares (of 2.4 mm traded) on January 12, 2000. Adam Smith & Company and R-H Capital are among the other US-based investment firms recently purchasing shares in CRY.
6. Altamira?s e-business fund holds CRY ? manager Ian Ainsworth listed CRY as a top pick in a recent Stockhouse interview.
7. The company?s application for NASDAQ listing, with sponsorship by Salomon Smith Barney and Fahnstock, has been approved. Trading on the Nasdaq National Market under the symbol CRYP is expected to begin on Mar. 20.
8. CRY has developed an e-cash product used in their licenced casinos, that is now housed in a separate division. CRY has said they may create a separate company for e-cash, involving a rights offering to CRY shareholders and an IPO for the new company.
9. CRY?s flagship casino at https://www.intercasino.com, the biggest and best online casino, was launched in November, 1996, and now has over 230,000 registered users. CRY has 14 licencees, with some hosting multiple casino sites. Total registered users for all licencees now exceed 500,000.
10. CRY licenced a casino to William Hill, the second largest betting shop in Britain (with over 1,500 offices). That casino, at https://www.williamhillcasino.com, is now taking real-money bets.
11. CRY has signed an agreement with Jupiters, a leading land-based casino in Australia, to launch an online casino in Australia?s regulated environment. Jupiters described it as a 50/50 joint venture. A multi-lingual ?play-for-fun? version will be up shortly, with the real money version expected in about six months (after the software receives regulatory approval.).
12. CRY?s most recent software (version 3) includes 3-D elements and live-chat with other players for some games. Version 4, to include sportsbooks for all licencees and other enhancements should be released soon.
13. CRY software is the best-reviewed casino software, including 3 ½ Aces (out of 4) rating from Rolling Good Times (https://www.rgtonline.com), the highest rating of any online casino, and Green Light rating from PC Computing magazine.
14. CRY purchased Gamesmania, a leading web-gaming (non-gambling) site, for about $450,000, and sold its interest for $1.7 million in cash and stock in the purchaser, Hip Interactive (HIPI on the Canadian OTC market).
15. CRY owns a 4.3% interest in https://www.creditcards.com.
16. CRY processed over $1.6 billion in secure deposits in 1999 for its licencees.
17. CRY had revenue of $12.5 mm in 97, $22.9 mm in 98 and $32.7 mm in 99.
18. CRY had fully-diluted earnings per share of $0.43 in 97 ($0.63 before unusual items), $1.10 in 98 ($0.94 before unusual items), and $1.35 in 99 ($1.31 before unusual items).
19. CRY has shares outstanding of 11.1 mm, (15.6 mm fully-diluted).
20. CRY had cash of $46.0 mm as of 99.12.31, and no debt. The company is looking for potential acquisitions, including possible consolidation within its own industry.
21. CRY announced a normal course issuer bid to buy back 5% of its shares. They have purchased around 35,000 shares under C$20.
22. CRY is covered by 3 analysts in Canada, with two strong buys and one speculative buy ratings. Sprott Securities upgraded CRY to a strong buy recently, with a new target price of C$75. CTI Capital today upgraded CRY?s target price to C$100. Consensus earnings estimates are C$1.94 (US$1.34) for 99, and C$2.56 (US$1.77) for 2000.
23. CRY is included in Investor?s Business Daily?s E-Commerce Index.
24. A bill to ban Internet gambling has been sponsored by Senator Kyl. It died in the last Congress, but has been re-introduced. There are mixed opinions on its prospects, but it has kept name-brand casinos from entering this market.
25. A competitor, Starnet, was raided by the RCMP in August 1999. No charges have yet been filed, but if filed they could relate to gaming in Canada.
26. The market is growing, with analysts projecting various growth targets in the range of 100% a year.
27. Jason Ader, an all-star analyst at Bear Stearns, released a research report on the internet gambling industry. Mr. Ader includes CRY in a list of companies to watch, that are likely to ?survive future changing market conditions throughout the world.? Mr. Ader describes CRY as ?the company with the largest market share in Internet gaming.?
28. Headline from Bear Stearns? press release on their e-gaming research report: ?Is Internet Gambling the Next Internet Explosion? Bear Stearns unveils a comprehensive report on what could be the next big investment opportunity on the Internet?
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