Multimedia Games Has Got Bingo

Multimedia Games (MGAM ) is "one of the most compelling gaming stories." So says David Bain of Roth Capital Partners, who rates it a strong buy. The stock, which zoomed from 4.75 on Nov. 3, 2000, to 28 on Nov. 7, 2001, "is just beginning to reflect the story," he says.

That story is quite unusual: Multimedia makes interactive bingo games and related electronic equipment mainly for Native American-owned bingo halls and casinos. Multimedia installs the slot-machine-like bingo player stations free of charge. But it keeps 30% of the take: Each machine clears nearly $200 a day--harvesting $60 a day for Multimedia. The company's other products include MegaBingo, MegaCash, MegaMania, FlashCash, Bingo Express, and MegaRacing. Multimedia's earnings have been "explosive" in the past three quarters, compared with losses for previous years, says Bain. He sees earnings of 30 cents a share, on revenues of $45.3 million, in the fourth quarter. For all of 2001, Bain figures Multimedia will earn 80 cents, on sales of $129.3 million, and $1.50, on sales of $174.4 million for 2002. But Bain expects the company will beat his estimates for both 2001 and 2002. In 2000, Multimedia posted a profit of 46 cents a share on revenues of $95.3 million.

By Gene G. Marcial

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