Filed under WTF - 500.com Limited (WBAI) - the Chinese online sports lottery firm - announced today that the Chinese Ministry of Finance and Ministry of Civil Affairs, demands they temporarily suspend accepting online purchase orders for lottery products. This means 500.com is not cuirrently generating any revenue at all. The CEO and another Director of the firm resigned. The result... a 25% surge in the stock price!!!
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Full PR Statement:
500.com Limited (WBAI) ("500.com" or the "Company"), a leading online sports lottery service provider in China, today reported its unaudited financial results for the first quarter of 2015.
Temporary Suspension of Online Lottery Sales
Since March 2015, all provincial sports lottery administration centers to which the Company provides sports lottery sales services have temporarily suspended accepting online purchase orders for lottery products, in response to the Notice related to Self-Inspection and Self-Remedy of Unauthorized Online Lottery Sales, or the Self-Inspection Notice, which was jointly promulgated by the Ministry of Finance, or the MOF, the Ministry of Civil Affairs and the General Administration of Sports of the People's Republic of China on January 15, 2015.
On February 24, 2015, the Company was informed by certain provincial sports lottery administration centers that as part of their respective self-inspection processes, such provincial sports lottery administration centers planned to temporarily suspend accepting online purchase orders for lottery products starting from February 25, 2015. On March 2, 2015, the Company was further informed by the remaining provincial sports lottery administration centers to which it provides sports lottery sales services that such provincial sports lottery administration centers also planned to temporarily suspend accepting online purchase orders for lottery products, in response to the Self-inspection Notice.
As a result of the provincial sport lottery administration centers' decision to temporarily suspend accepting online lottery orders, or the temporary suspension, 500.com's transaction volume decreased significantly. The Company recorded operating loss for the first quarter of 2015 and is currently not generating any revenue due to the temporary suspension.
Board and Management Changes
On May 15, 2015, the board of directors, or the Board, approved the following changes in the Board and the management of the Company, with immediate effect:
Mr. Zhengming Pan, the president of the Company, was appointed as the chief executive officer of the Company. Simultaneously, Mr. Man San Law resigned from his role as the chief executive officer and remains the Chairman of the Company.
Mr. Qi Li resigned as a director of the Company for personal reasons and Mr. Zhengming Pan was appointed as a director to fill the vacancy. Mr. Man San Law was appointed as the chairman of the compensation committee of the Board and Mr. Zhengming Pan was appointed as a member of the strategy committee of the Board."
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Even the bullish analysts have given up on this one...
- *500.COM RATING SUSPENDED AT PIPER JAFFRAY
500.com expects total purchase amount to be zero in 2Q; says “there is no clear indication” how long temporary suspension of online lottery purchases will last.
