Anchor Gaming stock plunges

Gary Thompson

Thursday, Dec. 4, 1997 | 9:53 a.m.

Anchor Gaming Corp. shares plunged 15.8 percent before Nasdaq halted trading Wednesday on what some analysts attributed to surprise over the scope of insider sales.

The analysts comments were somewhat surprising themselves, since the stock sales by Anchor Chairman Stan Fulton and members of his family were widely reported before and as they occurred in October.

A more likely cause of the price drop was growing concern that Anchor might not meet analysts' estimates for current-quarter earnings. Late Wednesday, the company seemed to confirm that speculation, saying weather and other problems might impact certain operations.

Anchor stock was quoted at $64 a share, down $12, on volume of 1,273,900 shares when Nasdaq suspended trading just before noon Pacific Standard Time Wednesday. In the past year, the stock has traded as low as $23.50 and as high as $99.75.

Since Oct. 13, Anchor has fallen more than $30 a share. During that period, Fulton sold 657,700 shares for more than $57 million, and other Anchor executives, including two of his children, sold 1.08 million shares.

In all, the insider stock sales totaled more than $93.7 million.

Anchor's stock had risen on strong sales and lucrative profit-sharing agreements with the casinos that place its slot machines. Anchor's machines, with unique visual presentations and game features, generate two to four times the revenue of the average slot on the casino floor, analysts say.

Anchor Gaming may soon face more competition as industry giant International Game Technology prepares to ship similar machines to Anchor's next quarter, some analysts say.

Fulton had said he and his family sold shares to diversify their financial holdings. He pointed to the more than 5 million shares he and his family still own as evidence that he remains confident in Anchor's continued growth.

Late Wednesday, Anchor said bad weather in Colorado in late October caused its casino operations there to close for three days and cut gaming win. It also said its joint venture with IGT "may be experiencing seasonality in its results of operations, which could affect earnings."

And Anchor said it will record an "unforeseeable one-time charge resulting from an unresolved matter with a third-party vendor to the Anchor-IGT venture, which will be reflected in Anchor's current quarter results."

"As a result of the foregoing," Anchor said, "it is likely that earnings for the quarter ending Dec. 31 may not meet analysts' expectations, although this is not certain."