Scientific Gaming buys WMS

[uniman]

WMS gaming has been purchased by Scientific Gaming. Scientific Gaming is in the lottery business and now expanded into the slot business. They will need to apply for a Nevada license.

 http://news.sportsinteraction.com/casino/scientific-games-buys-out-slot-machine-maker-wms-for-1-4-billion-61038/

[knagl]

Wow, that's huge.

[jay]

SGMS  is the stock symbol
There stock just fell big time on a huge 4Q loss.
5.53 is their 52week low, 12.29 was their high, currently trading at 8.80
They hit their high in April.
I looked at them in July when they were a 6.00 stock and in comparison to their peer Shuffle Master they were cash short.

I took in the Cisco Live conference in July in Sandiego and they had about a dozen or so attendees which did seem strange for a cash strapped company.
Sandiego is not that far from NV but I doubt these guys flew. I asked one of the guys about the stock, and he said if he didn't have company matching on his 401K he would put his money pretty much anywhere else.

In the last month they have been as high as 9.33 and as low as 8.27 thats more than 11% volitility.

I am however super surprized by the acquisition, according to the anti-trust article its valued at 1.5b, while I will never see a 'b after any of my accounts I would have thought WMS would have had a much higher market cap than that. Whats even more surprizing to me is that this deal is being done in cash.
Where is SGI getting the cash ???

I still think Shuffle Master is a better stock..... SHFL its stitting at 17.05, has had a $2.00 swing in the last month so similar volitility to SGI.
From a fundementals basis I believe that SHFL has more potential to feed the growing market in Asia, especially with ties to Wynn and LVS who both have casinos in Macau and LVS in Singapore. On the other hand the Asian markets don't like slots. So from an upside SHFL is better poised than SGI+WMS

This is just my opinion.

[knagl]

I still think Shuffle Master is a better stock..... SHFL its stitting at 17.05, has had a $2.00 swing in the last month so similar volitility to SGI.

If only you knew how well you were seeing the future!  SHFL surged to over $22.50 a couple of weeks ago following news that Bally was going to buy them.