Electronic Game Card Inc. (EGMI) Conference Call 10AM EST Wednesday
Electronic Game Card (EGMI) update conference call will be one of the most important calls in the company’s history. The company has grown its revenues from $1 million FY 2006, $6 million FY 2007, $10.5 million FY 2008, and expected to be $15-16 million in revenues for FY 2009. EGMI’s corresponding EPS over the last four years, -$2 Million FY 2006, $3.5 Million FY 2007, $6.2 Million FY 2008, and expected to be $10 Million FY 2009. Any company that has grown revenues and net income this consistently combined with a Fort Knox balance sheet ($12m cash/0 debt), should trade at 20x+ forward EPS. EGMI is currently trading at $1.03 or 7x FY 2009 EPS guidance. This ridiculous valuation would be laughable to me if I didn’t own so many damn shares. The company has tried its hardest to destroy shareholder value by offering zero communication on many administrative blunders over the last three-four months. Any other management team would have fixed these issues months ago. With all this being said, the company’s fundamentals are very strong, so in many ways the upcoming CC is a real opportunity to right the ship and instill shareholder confidence. As a large shareholder I would like to hear the following:
- Reaffirmed Guidance for FY 2009, $0.14 EPS
- Reaffirm Analyst Guidance for FY 2010, $0.19-0.20 EPS
- Update on new CFO/Directors
- Update on shareholder meeting/proxy
- Update on China Lottery Rollout
- Update on Iquiz Card UK/US Rollout
- Update on Thomas the Tank UK Rollout
- Update on Sovereign (US Native American Casino) Rollout
- Update on Scientific Games Agreement/ US Lottery Opportunity
- Update on international lottery initiatives (ie Poland, Romania etc)
- Update on FMM Moscoe Big Box Rollout
- Update on POKEN relationship, Where does this stand?
- Update on other deals that were hinted at during past presentations (ie: American Idol, National Geo, etc)
- Update on monetizing the company’s investments ($8 million on balance sheet)
- Update on Lord Steinberg Estate
- Plan for Cash on balance sheet (buy back, acquisitions, etc)
I would encourage any existing or potential investor to participate on the call. With all the past follies hopefully behind us, any sign of constructive thought (shouldn’t take much 
by management will likely see the stock rise quite a bit from the current multiple.
| Conference Call Details: | ||
| Date/Time: | Wednesday, February 10, 2010—10:00 a.m. (ET) | |
| Telephone Number: | 888-680-0860 | |
| International Dial-In Number: | 617-213-4852 | |
| Participant Pass code: | 98870967 | |
| Internet Access: | www.electronicgamecard.com or www.earnings.com | |
It is recommended that participants phone-in at least 10 minutes before the call is scheduled to begin. Participants may pre-register for the call at - https://www.theconferencingservice.com/prereg/key.process?key=PMH7N48NK
Disclosure: LONG EGMI
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Do you think the delay has anything to do with the upcoming (3/15/10) maturity of the Series A and the associated warrants?
No, I highly doubt that. They have enough cash to buy out the preferreds if need be.
IC
Ian,
Shares do not appear to be trading today. Any idea what gives?
Chaz
It’s 12:00 pm here in NY and far as I can tell trading has not opened as of yet. Anybody know whats up
February 19, 2010
The Securities and Exchange Commission (“Commission”) announced the
temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the “Exchange Act”), of trading in the securities of Electronic Game Card, Inc. (“EGMI”), of Irvine, California, at 9:30 a.m. on February 19, 2010, and terminating at 11:59 p.m. on March 4, 2010.
The Commission temporarily suspended trading in the securities of EGMI because of questions that have been raised about the accuracy of assertions by EGMI, and by others, in financial disclosures to investors concerning, among other things, the company’s assets.
The Commission cautions brokers, dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company.
It’s 12:05 in NY and trading has not opened. Any one know whats going on.
wonderfull
Ian
Do you think this is some type of financial fraud. It looks like the stock trading won’t be reopen until 04/04/2010. Is this correct? Is it possible that the stock value goes to zero??? Thank you.
Ian,
I am sure this is very upsetting to you as well. I follow your Web site often and appreciate all your insight. I was wondering if you have been able to get thru to the company today and have any type of update on what the SEC has halted this for? (Trying to prepare myself for even more bad news…)
Sorry, I mean it won’t be reopen for trading until 03/04/10. Thank you.
I guess this means we, EGMI shareholders, are pretty much screwed. Will have to wait till next year to write off this investment. Is there any example of a company emerging out of a trading suspension and trading at pre-suspension levels?
I think there are two scenarios, Not Good, and Really Not Good:
Not Good: The company can prove to the SEC that the books are fine by the time the trading halt is lifted. In this scenario the stock probably drops to 50-70c.
Really Not Good: The company doesn’t prove the books are clean. Well then pick a number.
IC
As I understand it, on or after 3/04/10 one or more broker dealers will get to examine the SEC case and determine if they want to make a market in the security, if the findings are really bad they will not and the stock is worthless. Keep in mind that Tricadia and Manatuck just filed 13G’s, lets see where they come in with this. ( In fact manatuck just emerged from a mess)
So if the books are not clean can we expect that the executives will be hauled off to jail at least?
Oh yeah, heads will roll.
IC
Ian, is there any example of a company emerging out of a trading suspension and eventually trading at pre-suspension levels? I looked at the list of companies whose trading was suspended recently and things dont look promising.
http://www.sec.gov/Archives/edgar/data/1083036/000119983510000094/electronicgame.htm
Dont know how much the restatement and “adjustment” will cost us…
No matter what happens it won’t be good. I have been trying to be positive but it’s hard, especially after thinking about it in the last day or so. The one thing that I don’t understand is Lord S and is he connected somehow. I just keep thinking about Madoff and that whole mess. Hate to admit it but something is very wrong here
Remember the so and so who forgot to pay the insurance on whatever; maybe there was no cash to do so ; or maybe he decided to pay himself a big really big bonus. Well what ever the scenario,come March 4th, we still won’t know the whole story. The broker dealers will hold all the cards, if the stock resumes trading at that time or soon after there maybe hope in the long run. lets not forget some firms had just up there shares significantly. Any way I have beaten this dead horse enough. I prefer trading commodities much more honestin many ways.