“The $7 Tech Company That’s Fueling Macau’s Boom”

By Travis Johnson, Stock Gumshoe, April 15, 2007

This one comes to us from Ian Cooper at Early Alert Trader, and it’s another China play — this time, on the boom in Macau. But it’s not the easy-to-figure casino companies that we all know so well.

This is a little gaming technology company, and Ian thinks it’s going to go from $7 to $50 … “with the deals it’s signing with the major billionaire players setting up shop there, I’m conservatively predicting a gain of as much as 614% for early investors in the next 12 months.”

He writes a lot about Macau in this long ad — lots of talk about how it’s quickly becoming bigger and much more lucrative than Las Vegas.

“This small Chinese city is the ONE place you’ll want your money to be heading in 2007, and I’ve just uncovered a company primed to take full advantage of the explosive situation. This $7 tech company could show you as much as 614% in the next 12 months.”

And he talks about Sheldon Adelson and Steve Wynn, who are seeing their names move up the Forbes list thanks to their massive investments in Macau (through Las Vegas Sands and Wynn Resorts, respectively).

And this growth is supposed to spur the growth at this small tech company — “that’s because this company is producing the technology that Steve Wynn and many other moguls in Macau are using to attract millions of customers, day after day, week after week, month after month, to their casinos.”

There are plenty more clues:

“Its product is so loved by Asian tourists that the casinos can’t keep up with the demand for it.”

“In the last month alone, it’s signed six major deals in the Macau region! And the best part is, its stock is still grossly undervalued at only around $7 a share.”

“The cutting-edge security technology that it produces and supplies to the casinos in Macau is setting the standard in its industry.”

“This small company’s recent meteoric rise began back on August 3, 2006, when it completed a deal to purchase an even smaller gaming technology company … with the proprietary technology it purchased, this company acquired the tools to become Macau’s leading provider of electronic gaming machines for the lavish, multibillion-dollar casinos being built there as you read this.”

So this is a tech company that’s somehow involved both with with security, and with Chinese video gaming machines.

But there’s more!

“The best part about this $7 company is that the Macau government has officially named it as one of the few approved suppliers for this gaming technology to all the casinos and hotels in the region … you see, the company it purchased owns and produces the technology for one of the few Chinese games approved by the Macau government and gaming commission for use in its casinos.”

They have in the last few months inked deals with some big customers: Holiday Inn Macau, Casino Lisboa, Jai Alai Casino

But the gaming is just one part of this company’s business — “one of its subsidiaries [was] selected by China Telecom Corp, one of China’s largest telecommunications conglomerates, to supply it with management consulting and call center training.”

And they got a deal to run Sony’s e-commerce site in China as well.

So would you like to sign up for a subscription, and get the Special Report, “The Most Lucrative City in the World: How to Bank 614% off the Rise of Macau”

Feel free.

But if you just want to know the name of this wee tech company that’s supposed to go up … what was it? Oh, yes, exactly 614% … well, you’ve come to the right place.

The Stock Gumshoe reaches into his mindometer and stirs it around a bit, and suddenly feels compelled to tell you that the name of this company is …

PacificNet (PACT)

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And the one little clue Ian didn’t provide? The company is delinquent in its reporting, so you might want to look into that. And they’ve received a delisting warning … I haven’t looked into the details, but they’ve also received these warnings before in the past year, so I don’t know if there’s any kind of systemic accounting problem that’s keeping the shares depressed.

The good news, if you’re looking for a silver lining, is that it’s not a $7 company anymore … it’s a $5 company, thanks at least in part to the latest Nasdaq warnings and some pricky relations with their auditors. It was up around $7 just a month or two ago, so I expect that’s when this email started circulating.

They have signed all the deals noted above, and they are a broad line tech consulting firm as well, the games division is a fairly small part of their business. The acquisition that brought them the Macau gaming business was