Tuesday, October 28, 2008

Dow up 500 pts, LVS down 14.6 percent

UPDATE, 9 a.m. 10/29: MGM Mirage announced its 3rd quarter profit was down 67 percent and that it's putting a freeze on plans for new development in Atlantic City and Las Vegas beyond CityCenter. Overall occupancy in Vegas fell to 95 percent, which doesn't sound that bad, and Bellagio earnings were actually up 8 percent. As a result (?), MGM stock is up 24 percent right now. LVS is up 71 percent! Boyd up 21 percent! Wynn is up 31 percent! Bargain hunting? I don't get it.

The Venetian folks just can't catch a break. This ski-slope is their graph for the past month. Even when the market recovers 9.5 percent, LVS' value plummets. Down another 14.6 percent today? There has to be a floor, right? $5 a share for a company with these kinds of assets? Just look at this freefall in the past few months. This stock closed at $138 on 10/30/07. Can someone explain what's happening here? Could Sheldon Adelson go broke?


Gary H - NLV said...

John McCain and Sarah Palin can turn polls showing them to be losing around which might help raise stock market prices including the Las Vegas Sands Corporation.

Here is a “modest proposal” regarding how the Republican Party and Sarah Palin, should have dealt with the news that Bristol Palin is pregnant, something it still is not too late to do.

Many Americans may remember when Conservative stalwart and former U.S. Vice President, Dan Quayle, railed against the fictional Murphy Brown for glorifying unwed mothers. As I don’t believe the Republican Party’s or Sarah Palin’s views on pre-marital sex and teaching “abstinence only” have changed since Mr. Quayle’s speech, my “modest proposal” is that Sarah Palin, at the very least, be required to pin a scarlet H (for Hussy or, maybe for this generation, Ho) on her daughter’s chest. Ms. Palin may also want to consider scheduling a public stoning for Bristol. Even though it is sad that Bristol Palin broke the Ten Commandments by not honoring her father and mother by obeying their “abstinence only” spiel on the “birds and the bees,” all is not lost. A public stoning would really bring home the message that premarital sex is a sin. Also, just imagine how many undecided, born again, Evangelical-Christian, conservative voters may choose to vote for the McCain/Palin ticket if given an opportunity to view the stoning on broadcast television.

Anonymous said...

Keep in mind I'm just a dumb Okie, but, I don't think he's going to go broke. I don't think he has pressing personal liquidity issues, such as margin calls on company stock he bought at a much higher price. Plus he controls something like over 75% of the stock, which I think means most of his borrowed money is against the property, and not the stock value. The property should be much more stable in value than the stock.

However, I think he has conducted business is such a manner as to have few friends in times like these. The downside to that being in such a fragile and easily spooked market, such as exists today, there can be some emotional settling of scores in the minds and wallets of people that matter. An example of the opposite effect is Boyd Gaming, where the company's positive regard in the industry means that any talk of them failing or being taken over gets almost zero traction.

Jeff in OKC

Anonymous said...

Word to what Jeff said. I'll take a few addt'l stabs ...

Sands has almost $20 billion tied up in development in Macao, Singapore and Bethlehem, PA (one of these things is not like the others ... ). That's got to be making Wall Street nervous.

Adelson added a massive amount of new product to Macao just as that market started experiencing a downturn. His risk, unlike that of Boyd, MGM Mirage or even Harrah's, is concentrated right now in two markets. And Palazzo is considerably undershooting the benchmarks for a new megaresort.

Between that, the Wall Street crisis and Peking's micromanagement of the Macao economy, Sheldon was caught in a confluence of adverse events when his company was its most (over?)extended. IMO, that is.

David M. in LV

Frank in Vegas said...

The short are covering. If you shorted at $140, do you really care if you buy it back at $5 or $10? You are just not earning that last 3% possible