Playtech plans shares buyback

Gaming software giant Playtech is planning a buyback of around 10% of its shares in the hope of offering protection for long-term investors as Playtech board of directors does not believe the recent trading truly reflects the company's real value.

The company has been trading on the London Stock Exchange since 2006 and in the last year has seen its share price plummet over 30% stopping at a 237p low in April.

In a statement Playtech issued the market it stated that "given the disconnect between the board's confidence in the business and the company's recent share price performance, Playtech intends to utilize this authority, subject to market conditions, to repurchase up to 10 per cent of its own ordinary shares."

The decision for the share buyback comes during a time when Playtech's shares outperform all its eGaming competitors, except Sportingbet.com that had a stellar year in terms of its share price.

Overall the entire eGaming industry seems to be underperforming, reaching price targets well below the London FTSE average, probably due to the concerns investors have over attachments of various traded eGaming companies in non-regulated and volatile markets.

A perfect example of investors' reaction to the volatility of the industry due to lack or contradicting regulations happened last month when news of impending regulation in Germany from 2012 has adversely affected the share price of bwin.party as Germany is its core dot.com market.

Although Playtech has pulled out of the US market back in 2006 when the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed into law, and has done the same with the French and Italian markets when licensing laws were introduced, investors must be concerned over how future changes in Playtech's core markets can affect the company.