Good morning! Back to work today after a day off yesterday.

It looks as if the sell-off in the USA has abated, at least for the time being. So maybe we might see some share price recoveries over here? Or maybe investors with cash will sit on their hands for the time being? It will be fascinating to see what happens. Personally I'm starting to see bargains appear, as good news is ignored, and the things I'm focussing on are companies with good dividends and strong Balance Sheets - although that's what I always focus on anyway because the downside is very limited with that type of stock (providing the dividends are sustainable).

NetPlay TV (LON:NPT)

Share price: 7.5p
No. shares: 296.6m
Market Cap: £22.2m

Trading update - this starts off sounding positive, with these positive opening statistics;

      21% increase in new depositing players to 18,853 (Q3 2013: 15,566)

     22% increase in active depositing players to 35,225 (Q3 2013: 28,890)

     High level of marketing spend results in expected full year results to be below market expectations

     Cash balances £13.4m at 30 September 2014 equating to 4.5 pence per share.

But hang on a minute! I did a double-take when reading point 3 - surely high marketing spend should deliver positive results, not negative results? After all, they are reporting a 22% increase in customer numbers. We have a problem here.

More is revealed here;

Despite the Group's level of marketing spend, it has not achieved the targeted levels of new customers and net revenue expected from this spend. This situation combined with the current trading environment, and the initiation of POC means that the Board expects current market expectations to be materially lower than forecast. 

Oh dear. This suggests that something is structurally wrong with their market - maybe some customers have just run out of money to gamble with? After all, we are in an era of declining living standards for many people as their real disposable incomes are eroded.

Also there is material uncertainty over the introduction of new gaming taxes shortly. I've never believed this company's reassurances on that point, talk of mitigating the impact, etc. In my view it's safer to wait and see how things actually pan out, when there is any doubt over changes in regulations. Also, to my mind by far the biggest "tell" was large Director selling…

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