Lakes Entertainment, a casino development and management company that is the largest WPT Enterprises shareholder at 61 percent, has announced that it is to distribute all of its World Poker Tour Enterprises (WPTE) stock to shareholders as a special dividend.
The distribution involves 12 480 000 shares, Lakes President and CFO, Tim Cope said: "The spin-off of WPTE shares to our shareholders provides an option for them to monetize the value of WPTE shares if they so choose. Lakes will benefit in that we will no longer be required to consolidate WPTE's financial and business information in our SEC filings. This will enable us to provide greater transparency of Lakes' operations and financial results to our shareholders and the public."
WPTE shares had already been under pressure, prior to the announcement. Once trading at a high of $29.50 on the news that poker legend Doyle Brunson had made an unsolicited bid for the company , WPTE's shares closed at $0.41 on Tuesday.
With 61 percent of WPTE's new shareholders waiting to "monetise" or sell off their special dividend, WPTE's stock could see further downward pressure, a situation that existing investors in the poker company are hardly likely to appreciate.
WPTE was already under a delisting notification from the NASDAQ stock exchange due to a rule which says that a stock cannot close below $1.00 for 30 consecutive business days, which WPTE shares had done by the middle of August. At that point WPTE was given 180 days to demonstrate compliance, which would require that the stock trade above $1.00 for ten consecutive business days (see previous InfoPowa report).
At the time of the delisting notification, the WPTE said, "The Company will continue to execute its business plan to provide an opportunity to demonstrate value to the investment community and regain NASDAQ compliance." The odds against this "wait and see" strategy got increasingly longer with Lakes' recent announcement.
Lyle Berman is Executive Chairman of both Lakes Entertainment and World Poker Tour Enterprises. Steve Lipscomb is CEO of WPTE, but also is listed as the CEO and President of Lakes Poker Tour LLC, a subsidiary of Lakes Entertainment.