Are MGM And Las Vegas Sands Toast?

[NASHVEGAS]

Las Vegas Sands' stock price was down another ~50% this week and down ~95% from it's 52 week high of ~$149 per share.

LVS did announce early this morning (at the market open) that it was working with an investment banking firm to raise capital for the company. Adelson and family intend to partake!....Obviously, the street didn't go for it as the stock fell another $1.89 to close at $6.32 per share.OUCH!

www.streetinsider.com/Insiders+Blog...+Like...Las+Vegas+Sands...Are.../4092931.html

Cramer Thinks Major Casinos Like MGM And Las Vegas Sands (LVS) Are Done

October 24, 2008 8:31 AM EDT
""Today, in this market malaise, Jim Cramer responded to a post on RealMoney's columnist conversation regarding Las Vegas casinos, such as MGM Mirage (NYSE: MGM) and Las Vegas Sands (NYSE: LVS). Cramer is very bearish on both MGM and Las Vegas Sands.

Below is what Jim Cramer posted on his Real Money message board.
"Frankly i dont see how MGM or (Las Vegas Sands) LVS makes it. Vegas is getting killed and the Chinese are being really tough about Macau... Kerkorian obviously will do everything he can to keep this going but so did Adelson... I am very bearish about everything Vegas..."

MGM MIRAGE is a gaming company. It is engaged in the ownership and operation of casino resorts.
Las Vegas Sands Corp. (LVSC) owns and operates The Venetian Resort Hotel Casino (The Venetian), The Palazzo Resort Hotel Casino (The Palazzo)."


Stocks Mentioned
LVS 6.32
-1.89 -23.02%
Volume: 21,714,101

MGM 11.20
+0.35 +3.23%
Volume: 6,288,241

 

[winbig]

Las Vegas Sands' stock price was down another ~50% this week and down ~95% from it's 52 week high of ~$149 per share.

LVS did announce early this morning (at the market open) that it was working with an investment banking firm to raise capital for the company. Adelson and family intend to partake!....Obviously, the street didn't go for it as the stock fell another $1.89 to close at $6.32 per share.OUCH!

Link Outdated / Removed

Cramer Thinks Major Casinos Like MGM And Las Vegas Sands (LVS) Are Done

October 24, 2008 8:31 AM EDT
""Today, in this market malaise, Jim Cramer responded to a post on RealMoney's columnist conversation regarding Las Vegas casinos, such as MGM Mirage (NYSE: MGM) and Las Vegas Sands (NYSE: LVS). Cramer is very bearish on both MGM and Las Vegas Sands.

Below is what Jim Cramer posted on his Real Money message board.
"Frankly i dont see how MGM or (Las Vegas Sands) LVS makes it. Vegas is getting killed and the Chinese are being really tough about Macau... Kerkorian obviously will do everything he can to keep this going but so did Adelson... I am very bearish about everything Vegas..."

MGM MIRAGE is a gaming company. It is engaged in the ownership and operation of casino resorts.
Las Vegas Sands Corp. (LVSC) owns and operates The Venetian Resort Hotel Casino (The Venetian), The Palazzo Resort Hotel Casino (The Palazzo)."


Stocks Mentioned
LVS 6.32
-1.89 -23.02%
Volume: 21,714,101

MGM 11.20
+0.35 +3.23%
Volume: 6,288,241

Maybe they should ask the Gov't to bail them out too?

I wonder how NV as a whole would fare if most of their casinos went belly-up and closed their doors for good?

 

[LaurieJim]

Maybe they should ask the Gov't to bail them out too?

I wonder how NV as a whole would fare if most of their casinos went belly-up and closed their doors for good?

great question win, i cant see the bigger ones going under, but i wouldnt be shocked with all thats going on now and unfolding day by day.......some one with alot of knowledge warned me 6 months ago, shit was getting ready to hit the fan, i should have listened better....................laurie

 

[winbig]

great question win, i cant see the bigger ones going under, but i wouldnt be shocked with all thats going on now and unfolding day by day.......some one with alot of knowledge warned me 6 months ago, shit was getting ready to hit the fan, i should have listened better....................laurie

I just wonder how the smaller casinos, such as most of those found on Freemont street, are doing?

 

[NASHVEGAS]

great question win, i cant see the bigger ones going under, but i wouldnt be shocked with all thats going on now and unfolding day by day.......some one with alot of knowledge warned me 6 months ago, shit was getting ready to hit the fan, i should have listened better....................laurie

It is truly the perfect storm.

MGM and LVS are so highly leveraged that the equity holders stand to lose the little they have left.....The debtholders (or a white knight with equity) will end up with the companies imo and given time a restructuring that leaves them all cleaner and leaner!!!.....Harrah's is also highly leveraged and the timing of the LBO, well no one could have foreseen!!

Need to study the Balance Sheets for WB since the G'ment now owns the Banks it may actually be another G'ment Bailout,

 

[Mousey]

This is where I think it's going to get hairy for casinos in the smaller markets (I'm thinking places like Tunica, Biloxi, NO, etc.). The Big Boys (MGM, Harrah's, etc.) came in and bought/merged, etc. into these places -- Harrah's, for instance, owns no less than 3 casinos in Tunica, a 9 casino town -- and now I fear the Big Boys may just close the doors and cut their losses in the smaller markets to try and save Vegas...

 

[Mousey]

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Tough Times for Gambling, Large Debt Force Shifts

By TAMARA AUDI, PETER LATTMAN and JEFF MCCRACKEN

Gambling giant Harrah's Entertainment recently cut the hours at some of its casino VIP lounges, and even replaced plates full of hearty sandwiches with bruschetta and hummus. The moves riled Harrah's middle-market customers, who are accustomed to getting the high-roller treatment in exchange for their loyalty.

The changes were a small sign of larger problems at the nation's biggest casino company.

Harrah's beckons visitors to the Las Vegas Strip. But an industry downturn and debt obligations are forcing the gambling giant to rethink what it spends to lure customers inside.
When private-equity firms TPG and Apollo Management LP struck a deal to buy the company for $17.3 billion in 2006, its market-leading position was viewed as a license to print money. But with consumer spending in retreat and real-estate markets in turmoil, Harrah's has instead become a license to lose it.

These days Harrah's labors under $23.9 billion in debt, much of it strapped on to fund the buyout. Its bonds trade at depressed prices. The cost of insuring against Harrah's defaulting on its debt, via credit default swaps, is among the most expensive on the market.

In August, the company reported a $97.6 million second-quarter loss, compared with a net income of $237.5 million a year earlier. Industry watchers say the company ....

"We were planning on the business to continue to be robust," Mr. Loveman said. "We were not anticipating that the world would fall into the circumstances it is in today."

The company is not alone: public shares of rivals Las Vegas Sands and MGM Mirage are down 94% and 87%, respectively

 

[NASHVEGAS]

Classic quote from Mousey's posted WSJ article: "The problem is that this is worse than the worst-case scenario."

A few other tidbits:
1.The casinos still cash flow but drops are less and continue that trend.
2.Vegas strip casinos have 8 straight months of decreasing year to year comparable revenues of ~7%. Unprecedented (since they started tracking iirc over 20 plus years ago) including 9/11 when travel was a four letter word!
3.Mississippi '08 casino revenue comparisons year to year are down ~3%!

Suggestions:
1.WYNN change name to LOSE
2.Increase cash flow by paying winners only $100/day, $200/week and $500/month
3.Void all winnings if comps are abused---I.E.,no refills or seconds at the buffet