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 Corporation Gaming Vendor Information
MGM Resorts International Ownership Details
Wynn Resorts Ownership Details


Copyright GamingWire. All rights reserved.
Featured Vendors
Betson Imperial Parts & Service
Slot Machines Unlimited
Betson Imperial Parts & Service
Your one stop shop for all your gaming and OEM needs!
Slot Machines Unlimited
Exporter of IGT, Williams, AVP, Trimline, Aristocrat, Konami, Bally, & parts over 20 yrs experience
Talisman Group Creators of EZ Baccarat
Casino Network
Talisman Group Creators of EZ Baccarat
With over 800 tables in 150+ casinos, EZ Baccarat is the number one brand in baccarat.
Casino Network
20+ years experience selling refurbished slot machines, parts & glass for all major brands
Broadband Hospitality
Rymax Marketing Services, Inc.
Broadband Hospitality
Improve these critical guest-facing amenities: In-room TV, Wi-Fi, Mobile App. Priced right. All here
Rymax Marketing Services, Inc.
Leader in creating award winning player & employee loyalty programs & events proven to increase ROI
New Level Radio
TOP ONE TECH LIMITED
New Level Radio
Your Casino. Your Music. Your Message.
TOP ONE TECH LIMITED
GLOBAL TOUCH SOLUTION PARTNER OF CHOICE,10+ years OEM manufacturing,100+ thousand units application
.Dot-iGaming.com
Imagine This
.Dot-iGaming.com
Fully loaded advanced casino platform. One time (low) fee, 100% your property, start now!
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
Oklahoma Indian Gaming Association (OIGA) Conference
Casino Schedule Ease
Oklahoma Indian Gaming Association (OIGA) Conference
The biggest little show in Indian gaming! Save the date: Aug 9-11, 2022 in Tulsa!
Casino Schedule Ease
Get a 90-Day Free Trial of 100% contactless, customizable table game & full casino scheduling
Casino City Press
Global Gaming Expo (G2E)
Casino City Press
A leading publisher and distributor of casino and gaming business data and market research reports.
Global Gaming Expo (G2E)
The largest gathering of global, commercial and tribal gaming professionals in North America.


Your Guide to 15,293 Gaming Industry Suppliers