PartyGaming CEO Quits, Profits and Share Price Drop

Online gambling giant PartyGaming announced yesterday that CEO Mitch Garber would be leaving when his contract expires next year.

Some news sources are calling it "a shock announcement" but some PartyGaming shareholders could be forgiven for wondering why Garber has remained at the helm for so long.

Garber presided over dark days for the struggling online gambling company, operator of iconic brands Party Casino and Party Poker. As the company floundered following the board decision to withdraw from the US market following the passing of the UIGEA into law late 2006, Garber proceeded to further undermine investor confidence with multiple large sales of his own holdings in the company.

Garber would argue that PartyGaming's performance in 2007 was merely the result of unfortunate circumstances. Yet all of PartyGaming's competitors flourished in 2007. 888 Holdings, Playtech and CryptoLogic all performed above expectations as PartyGaming's share price nosedived as the CEO offloaded his own holdings.

The search for a new CEO has begun, and the new man at the helm will be attempting to pick up the pieces of a shattered empire. PartyGaming is in protracted talks with the US DoJ and facing possible legal action. It is understood that PartyGaming instigated the talks themselves.

House broker Dresdner Kleinwort organized a sale of 87 million PartyGaming (LSE: PRTY) shares this week. Deutsche Bank AG analyst Jon Tarasewicz said there is "an element of management uncertainty" at PartyGaming and that it has been "disappointing to see net revenues running below expectations".

PartyGaming stock fell sharply last night, closing almost 10% lower at 25p. The next few weeks could see new lows for the one time king of online gaming.

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