500.com (WBAI) Stock Falls After Deutsche Bank Downgrade

NEW YORK (TheStreet) -- Shares of 500.com (WBAI) were falling 10.7% to $21.05 Thursday following a downgrade from Deutsche Bank.

The analyst firm downgraded the Chinese gaming company to "sell" from "hold" in a note to investors. Deutsche Bank raised its price target for the company to $13.80 from $11.

Deutsche Bank analysts Alan Hellawell III and Vivian Hao said "timing of a resumption of online sales remains anyone's guess," according to Barron's. 500.com had to halt its online lottery sales in February when the Chinese government decided to suspend the online sales in order to regulate the industry.

"500.com in the meanwhile is helping the MOF and Sports Administration Center to finish internal system testing and awaits the completion of a range of administrative tasks," the analysts wrote. "We expect some public testing after the Sports Admin Ctr reports to the MOF for approval. While business could resume in 3Q, and while 500 could enjoy preferential status initially, the purpose of planned licensing is to open up the market. Although 500 is a category leader, we feel the current share price envisages potentially overly optimistic assumptions post-moratorium."

Separately, TheStreet Ratings team rates 500.COM LTD -ADR as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate 500.COM LTD -ADR (WBAI) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself."

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