500.com posts fourth quarter losses


500.com the Chinese online sports lottery company, saw its shares fall in New York today after the company announced bigger loss for the fourth quarter ended Dec. 31.

It closed at $16.98 per share, down 82 cents or 4.6 percent.

The worsening financial result came in the wake of a provincial sport lottery administration centers’ order to temporarily suspend accepting online lottery orders, which is 500.com’s main business. As a result, the company did not generate revenue from sports lottery sales in the fourth quarter and full year of 2017.

The Shenzhen-based company reported revenues reached 48.1 million yuan ($7.4 million), six times more than a year earlier. Yet, net losses widened to 129.9 million yuan ($20 million), compared with 9.1 million yuan in the same year-ago period.

Looking ahead, the management is trying to expand the scope of its business and diversify the revenue streams.

“We acquired approximately 40.65% of the issued share capital of Loto Interactive Limited in the second quarter of 2017 and 93.0% of the equity shares of The Multi Group Ltd in the third quarter of 2017,” said Zhengming Pan, the CEO of 500.com.

Pan continued, “On March 6, 2018, we entered into a framework agreement with the China Sports Lottery Administration Center, under which, both parties plan to cooperate to develop physical channels to sell sports lottery tickets. We believe that these new businesses and strategic acquisitions will create strong synergies with our existing operation platform, and the Framework Agreement will bring us strong growth potential.”

In 2012, 500.com became one of only two companies in China approved by the Ministry of Finance to provide online lottery sales for the sports lottery agency. The company went public at the end of 2013, selling 5.8 million shares at $13 per share. However, the company has had to suspend accepting online purchase orders for lottery products in response to the notice from the Ministry of Finance on January 15, 2015.