This is a very large and complicated bankruptcy. It will take a long time to get it settled (maybe years) and in the meantime, CZR will continue to pile up losses. Earlier, you mentioned heavy call interest in some short term options but the dollar value is small. Take a look at the Jan 2016 options. Open interest in puts is huge and is almost 30 times greater than in calls. That gives more time for this bankruptcy issue to resolve itself and the big money is betting that this has much further to fall. CZR itself is warning that they may not be able to remain a going concern. If CZR is also pulled into bankruptcy, this will become a penny stock.
Can't blame some shorts for taking nice profits here but there are still plenty of shorts in this one with 14.4 days to cover. If I was a long, I would be more concerned as to why the stock price continues to fall despite the shorts taking some profits. I remain short.
I think those resort fees are a ripoff too. I don't think Station casinos charge them either. I haven't seen the Fox report but I imagine it's a class action suit. Just imagine the huge new losses that CZR would report if all those resort fees collected from former patrons had to be paid back.
In the news today, they replaced their key financial advisor with another one. Things are not going well for CZR's hopes to shed debt the way they planned. I remain short.
CZR reports another mind boggling $7 eps loss for Q4 vs analyst estimate of $1.65 loss. That makes a loss of $19.45 for the year (on top of $23 loss last year). Someone better call an ambulance or maybe it's too late already!
The only thing I'm aware of is that one of the CNBC traders commented yesterday that he bought the stock and call options after he noticed unusually high call volume in the stock options. This implies that someone who knows something that others don't is taking a leveraged position betting on the stock rising.
What wasn't said is that it could also be someone with a large long position selling calls to help hedge their position against further losses. I note that the volatility premium for puts is higher than the calls, suggesting that may well be the case here,
At any rate, earnings (Maybe I should say the report on further losses) comes out next week. CZR has been consistently losing much more than the analysts predict. We'll see but I think this will burst the balloon in this little rally. I remain short.
It's hard to see how a former CEO from auto rental and auto parts companies would be a good fit for a large casino company. On the other hand, he's a CEO with a demonstrated history of financial shenanigans....never mind, that should be a good fit at Caesars.
So, Gary Loveman now joins other top executives who decided to leave their positions with CZR. He will remain as COB but is leaving as CEO. It sounds like a good score for Caesars that they landed the former CEO from a multibillion$ company like Hertz. But then again, maybe not. Frissora, the new CEO from Hertz, resigned there for personal reasons. It appears he was booted by activist investors including Carl Icahn. It was also sudden as he was replaced by an interim CEO (Hertz has since found a permanent CEO) so apparently someone wanted him out of there fast.
Hertz has also retracted its financial statements since 2011 which require expanded audits and at least one law firm is looking into suing them. See today's Bloomberg article about Caesars new CEO and/or google "Hertz financial health remains a mystery".
Caesars continues to look like a good short to me.
I don't think there are any las vegas casinos that are smoke free now. Silver City, a small casino on the north strip, tried it many years ago but they failed. Apparently gambling and smoking are two vices that go together.
I come up with $1.97 estimate for Q1 using the midpoint of guidance which is still a nice beat compared to analyst estimates of 1.85. I expect we'll see some analyst upgrades by tomorrow or whenever they get back to work after the snowstorm.
It appears that ST is going to start charging you interest on your borrowed shares. I would call them and ask the rate. No fees on my short shares at TdAmeritrade but last time I checked there were no more available. Last time I checked Interactive Brokers had shares available but they also charged 4% interest (annualized).