I see longs congratulating each-other, I see people making comparisons to Netflix as a once beaten down stock surging ahead. Euphoria is everywhere.
What you don't understand is that ZERO value has been created for shareholders. NOTHING has been passed, nothing has been done to increase sales, increase profits... Nada... Zip. In the 4th Quarter of 2012 you will see that CZR's shareholder equity will be negative. Meaning shares of CZR are basically worthless. If the company were to go belly up, shareholders would owe money (except bankruptcy law prevents that now-a-days.)
No stock can go up without the profits and sales following. In fact, sales and profits probably will stay flat to probably negative since hurricane sandy hit NJ. CZR is defying the laws of Financial physics, and in the end the financials always win out.
The stock was trading around $7-$8 with the same financials CZR possesses today as it did yesterday and as it will for probably many more quarters to come. Yet, with 1 state pushing through potential legislation for the back end of the year the stock goes crazy and almost jumps 100%. New Jersey will not be able to save CZR or make a meaningful impact on sales or profits.
In Conclusion, the true value of CZR shares is probably closer to $7-$8 as the financials dictated before the HEADLINES changed the equity price. Also, the headlines did not change the financials. And even if the headlines were to change the financials, it would not do so for a very long time.
Very few people will listen to this simple but accurate analysis. The people who don't understand this are going to attack me. People only care about which direction the stock price is moving ( a very flawed analysis.) I simply just price equity. And the CZR equity ain't worth this 80% premium.
Good luck to you. And especially to the people who think this move is for real. Your going to get hurt.
I have no positions in CZR. I have not been shorting CZR and I don't plan to have any positions. Will CZR ever make a profit again? Nobody really knows. MGM will most certainly achieve this. And as profits drive stocks... MGM is in the right place. Not CZR.
Hey Tyler...or should I just call you "stupid"?
I've been sitting on CZR shares since they were at $7. You cannot fathom how frickin' frustrated I was with that stock for such a long time. But seeing that MGM was doing nothing, I wasn't complaining about casino stocks. When CZR got to $12 to match MGM, I KNEW something was brewing. I decided to swap. I lost close to $6000 on MGM. Guess how much I made so far with CZR? Made 35K just on the MGM swap. Yes, I'm frickin' euphoric!
So stop complaining and go where the action is. A bankrupt company doesn't payout like that, do you understand? The word is out, so CZR is probably going to stay cool and low. But when everyone forgets about 'em again, the rise will continue. It's not going under $17...unless that want me to make a shitload of money.
Been here since 2010 and I agree MGM is the best Long term hold but these's shorts are a nagging problem we need more stocks like facebook to get them out of here$$
Sentiment: Strong Buy
Thats very similar to what I used to state about mgm when it was rising from $12.80 to $17 and I said it would go to $8. People held long and laughed but my prediction came true in 10 months and 2 years later it still hasnt recovered. I'm just sayin....
It's not even really a prediction though... No value has been created for the shares. It was the same with MGM back in the day. MGM had "hopes" of an economic recovery. Now MGM has real math and financials driving it.
CZR's shareholder equity is still dropping and nothing changed by way actually bringing any money in the door.
Interesting you bring that up though... Some of these people are just nuts... I swear.