Casino News: UIGEA Action Hits Shares Hard In a United States Company

UIGEA Action Hits Shares Hard In a United States Company

 March 29, 2007, 7:12 pm (10 years ago)

Electronic Clearing House Inc, a United States Company, has noticed that the shares have plunged the most in almost fifteen years this week after the company revealed it is to hand over a substantial part of its profits following a United States government probe into online gaming. This result came from the withdraw from the purchase of a company by the name of Intuit Inc, which apparently spooked investors.

The Camarillo, California based company, Electronic Clearing House will turn over two point three million dollars in earnings to the United States government from its internet e-wallet business, which has collected payments to online gambling sites. The penalty itself comes from the United States Unlawful Internet Gaming Enforcement Act which was put into effect last October. This act criminalizes financial transactions with online gambling sites.

The maker of TurboTax Software, Intuit, and last year had agreed to pay one hundred and forty two million dollars or eighteen dollar and seventy five cents a share for Electronic Clearing, which is a twenty five percent premium to the share price on that particular day. Intuit wanted the company so that it could expand its online banking services to businesses.

Joel Barry, the Electronic Clearing Chief Executive Officer said that the company is open to other acquisition talks.

John Kraft stated “that’s not a mess Intuit wants to get into” who is an analyst at D.A. Davidson & Company which is located in Portland Oregon. He also went on to say that after the company in October said it would exit the internet wallet business “my sense was these guys were on the up and up, squeaky clean”.

The Electronic Clearing shares on NASDAQ dropped six dollars and forty cent or thirty four percent to twelve dollars and twenty one cent. This took place this week in their biggest decline since the month of July in the year of 1992. In the past twelve months the stock has fallen two point eight percent.

Located in Mountain View, California, shares of Intuit raised a total of eighteen cent to a total of twenty seven point five in the NASDAQ trading and have climbed a total of six percent in the past year alone. Barry said Electronic Clearing is “fundamentally sound” and will announce first quarter results in the month of May, which should show some improvements.

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