Casino stocks continue to plummet

24 October 2008

NEW YORK, New York -- Shares of some casino operators slid to new lows Thursday as the sector swooned from investor anxiety about the softening economy and an analyst said MGM Mirage's heavy Las Vegas concentration leaves it vulnerable.

The stock price of Las Vegas Sands Corp. fell to $8.21 on the same day a Pennsylvania newspaper reported the company was slowing construction on its $675 million resort on the site of a historic steel mill in Bethlehem, Pa. The Morning Call of Lehigh Valley reported the retail component of the Sands Casino Bethlehem was struggling to find tenants.

Las Vegas Sands Corp. spokesman Ron Reese said the casino portion of the project, and the retail, dining and entertainment components were on schedule to open in June. He said the plan had always been to open the project in phases. Reese wouldn't address speculation by the article's unnamed sources.

Las Vegas Sands fell $3.50, or 29.89 percent, on the New York Stock Exchange after making some slight gains from its earlier all-time low of $8.09.

In afternoon trading, the broader markets fluctuated as a mindset grew on the Street that the economy is either in a recession or headed for one despite government relief efforts and gradual improvements in world credit markets.

The casino sector, along with many other industries, has been squeezed as consumers curb spending due to the continued housing slowdown, eroding credit and escalating food costs.

Meanwhile, Nicholas Danna IV of Sterne Agee & Leach Inc. started MGM Mirage coverage with a "hold" rating and $11 price target. The analyst cautioned that MGM's dependence on Las Vegas, with more than 80 percent of its revenue coming within close proximity of the Strip, puts the casino operator in a tough spot "during a period of increasing supply and declining demand."

Danna also warned that MGM's $9.2 billion CityCenter project, set to open in Las Vegas late next year, is somewhat of a question mark as its returns are uncertain and the complex may hinder some of the company's existing Las Vegas properties.

On Wednesday, Fitch Ratings downgraded MGM Mirage on concerns about CityCenter financing.

Shares of MGM Mirage slid $1.59, or 12.78 percent, to close at $10.85. The stock reached a more than seven-year low of $9.75 earlier in the session.

Elsewhere in the sector, Wynn Resorts Ltd.'s stock dropped $4, or 8.63 percent, to $42.38 on the Nasdaq National Market. The shares sagged to $39.32 earlier, a multiyear low. Boyd Gaming Corp. closed at $4.20 on the New York Stock Exchange, down 65 cents or 13.40 percent.


Related Links
Boyd Gaming Gaming Vendor Information


Copyright GamingWire. All rights reserved.
Featured Vendors
Casino City Press
Shenzhen ZhengYuanTai Technology Co., Ltd.
Casino City Press
A leading publisher and distributor of casino and gaming business data and market research reports.
Shenzhen ZhengYuanTai Technology Co., Ltd.
14 years experienced gaming display manufacturer: open frame, curved, and halo monitors
Casino Schedule Ease
Dable Advisory & Consulting Services
Casino Schedule Ease
Full Featured & customizable for the complex scheduling needs of table games & other casino depts
Dable Advisory & Consulting Services
Advisory & consulting services services for Indigenous entrepreneurs, businesses & organizations
Indian Gaming Association's Mid-Year Conference & Expo
Regulatory Management Counselors, PC
Indian Gaming Association's Mid-Year Conference & Expo
The perfect combination of learning, networking & sharing ideas on today's hottest topics in gaming
Regulatory Management Counselors, PC
Over 45 years of experience serving the legal and regulatory needs of casino industry clients
TribalHub
Slot Machines Unlimited
TribalHub
25th Annual TribalNet Conference Sept 16-19, 2024 Westgate Las Vegas
Slot Machines Unlimited
Exporter of IGT, Williams, AVP, Trimline, Aristocrat, Konami, Bally, & parts over 20 yrs experience
Texas Slots & Gaming
Imagine This
Texas Slots & Gaming
Wholesale gaming reimagined. Texas Slots & Gaming is your sustainable gaming partner.
Imagine This
Imagine This #1 Source for Player Gifts. Over $50 million in stock ready to ship! Let us serve you!
Sunkist Graphics, Inc.
AmericanChecked
Sunkist Graphics, Inc.
Specializing in the creation of best-of-breed gaming graphics - slot glass, sign faces, and more
AmericanChecked
Background checks for the gaming industry with key & non-key packages & fingerprinting solutions
Betson Imperial Parts & Service
Talisman Group Creators of EZ Baccarat
Betson Imperial Parts & Service
Your one stop shop for all your gaming and OEM needs!
Talisman Group Creators of EZ Baccarat
With over 800 tables in 150+ casinos, EZ Baccarat is the number one brand in baccarat.
Global Gaming Expo (G2E)
Top One Tech Limited
Global Gaming Expo (G2E)
The largest gathering of global, commercial and tribal gaming professionals in North America.
Top One Tech Limited
Global Touch solution partner of choice, 10+ years OEM manufacturing, 100,000+ units application
Rymax Marketing Services, Inc.
Oklahoma Indian Gaming Association (OIGA) Conference
Rymax Marketing Services, Inc.
Leader in creating award winning player & employee loyalty programs & events proven to increase ROI
Oklahoma Indian Gaming Association (OIGA) Conference
The biggest little show in Indian gaming! Save the date: August 12-14, 2024 Oklahoma City
Players Pal
Players Pal
Revolutionize the way you connect with your casino players with the Players Pal mobile app


Your Guide to 14,960 Gaming Industry Suppliers