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Wednesday, December 23, 2009

Implied Value of Youbet.com Now $3.18 per Share, + 9% from Current Levels

Very brief: per our earlier posts, shares of Churchill Downs (CHDN, $36.98) keep pushing higher, implying more value to shareholders of Youbet.com (UBET, $2,91). Churchill announced a new financing arrangement yesterday that will allow the company to make the proposed $0.97 cash payment to Youbet.com holders. We estimate that this amount, plus newly issued shares of Churchill Downs to satisfy the stock component of the transaction, bring the implied value to $3.18, or up 9.4% from current levels. Shares may yet move higher assuming regulatory approval in early 2010. Market optimism regarding a stabilized economy may also help.

Happy investing,

Jeffrey Walkenhorst

Disclosure: long UBET.

© 2009 Jeffrey Walkenhorst
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