As noted many times here, unlike the HK shares for the other U.S. listed gaming companies, the MPEL listed shares essentially do not trade any volume there in no small part because Lawrence Ho and Packer (co-chairmen of MPEL) control 68% of the shares through their separately owned companies -- and essentially all the remaining float is institutionally owned and traded as ADS shares here. This dynamic is manifested in typical daily volume of the ADS equivalent of less than 15,000 shares...
Still, good to see all of these companies shares rise 2-3% today on the strength of Chinese construction companies and banking names running as Beijing moves to stimulate lending, real estate and international and regional commerce. Bloomberg has several good aeticles on these topics this morning.
MPEL shares have rallied almost 20% since the July 2013 low rejection last week as discussed on my recent thread on the topic. The stock danced around the 50d ema at $25 yesterday, and the 200d ema is down below $31 as the fog begins to show signs of lift again in China... all of that on top of no negative surprises from Xi Jinping and was obviously understood to be good news last week as hedge programs came off contemporaneously with MPEL buying back more than $200m worth of shares.
Better days ahead for MPEL and the other Macau names as all the bad news is known and has been repeated 700 or so times... and the pendulum shift to a good news cycle is now overdue in 2015.
Merry Christmas to all of the quality guys and your families!
Merry Christmas Dave!
You flagged out phone gaming a few months back and this update from ggrasia is interesting, but the HK exchange filing (from Galaxy maybe as they are still heavily reliant on VIP -- can't find it with a quick search) suggesting 20% of aggregate VIP GR in Macau is in the form of phone bets has to be far too high.
It may be that the two houses that formerly allowed phone gaming have recently dropped out have lost 20% or more of their business, but for them to suggest it is 20% of overall VIP and infer that others are either have or are now going to pull it under the glare of intensified scrutiny is to suggest that VIP has suffered no declines from other factors on a YOY comparison basis.
The other factors? (1) 100 or so of Xi Jiinping's political enemies (millionaire/billionaire "tigers") have fled to U.S. seeking political asylum and wealth protection based on their versions of how they got there, (2) last year in excess of 190 junkets had rooms/tables in macau; some believe that is cut by 75%+ now and likely going to less than 15 tours on a large drop off in number of small tour operators, (3) many former VIP tour patrons are now the highly sought/valuable "premium mass" players on direct credit with the various casinos, (4) many allegedly "corrupt" officials have been identified following the 75,000 reviewed per Beijing's release of info on it two months ago -- at least 690 of those guys have either been taken out, had their careers ended and wealth taken, or fled China... but it is highly likely they won;t be coming back to Macau for any reason, (5) as a result of all the foregoing and the "chilling effect" Xi Jinping's anti-graft initiatives have had on not just "bad guys" but also legitimate business people in china, it is clear many continue to lay low -- perhaps especially during Dec leading up to Xi's visit.
Chinese player VIP has been clipped, but 80% of peak VIP GR is still happening on legit/legal and rule compliant tours.
ain't today's move special? Hope all of the idiotic bashers here are enjoying themselves.
MPEL continued the string of consecutive daily buybacks yesterday (12 days in a row now), adding another 403,260 shares thus bringing total buybacks this quarter to 8,508,794 ADS equivalent shares.
As noted above, very sector knowledgeable "smart money," including the guys running this company and owning 2/3s of it, are gobbling up all the shares people will sell down here... and still they have roughly $200m of authorization remaining on the initial $500m buyback plan.
Good to see them make this statement about how they feel about trading at the lowest fwd ebitda multiple since they started the company, particularly given the Macau room count will almost double and between that and the COD Manila rooms opening right now, MPEL's footprint (room count) will increase a total of some 140% between now and August.
NYT this morning
HONG KONG — The former second-highest ranking official in the Hong Kong government and a property tycoon were sentenced on Tuesday to seven and a half years and five years in prison after their convictions in a high-profile corruption case.
The former official, Rafael Hui, served as chief secretary, the city’s top civil service job, from 2005 to 2007. He became involved in illicit dealings that led to a jury’s finding him guilty on Friday of five charges, including misconduct in public office. Thomas Kwok, one of two brothers who were co-chairmen of Sun Hung Kai Properties, was also found guilty in a conspiracy to commit misconduct in public office.
“You were highly regarded, articulate, diplomatic and obviously able,” Andrew Macrae, the judge who announced the sentence, said of Mr. Hui. “You were blinded by the desire to sustain the high life to which you’ve become accustomed.”
Raymond Kwok, who is now the sole chairman of Sun Hung Kai Properties, was found not guilty. Two additional defendants, found guilty of helping to pass on the illegal payments, were sentenced to five years and six years in prison.
Lawrence Lok, Thomas Kwok’s lawyer, said outside the High Court on Tuesday that he would consider filing an appeal in the next few days, but he conceded that the sentence was “proper” and “quite lenient.” Edwin Choy, Mr. Hui’s lawyer, said as he left the court that he did not yet know whether his client would file an appeal...
goog title for full article, these guys were in trouble before Xi Jinping became president, so they were not "fox hunted" as "political enemies" or "dissenters"... but if they were baccarat players, they won;t be back to macau playing tables games for a few years.
The trial and sentencing of Mr. Hui and Mr. Kwok came at a turbulent political time for Hong Kong. Beginning in late September, tens of thousands of dem
below is one of the dumbest posts of the week...
Here is my "declaring victory" as the putz writes from the other thread. LOL
"Can it retest recent lows? of course... but good to see the hard bounce off the July 2013 low at $21 and MPEL still sopping up discarded shares down here. $200m or so remains on the first leg of the Company's buyback plan..."
fraught with misconceptions and errant thinking... or is it all just a lightweight writer repeating the bs a hedge fund is feeding him for a fee? The only thing he said that made sense is that mass is holding up, but he doesn't even have that data correct. He, and all the other media outlets that clearly have no understaning of junket operations, continue to talk about how patrons use the junkets to direct money away from the mainland on an illicit basis. LOL It is decidedly not "illicit transfer" to go to Macau to play and then settle debts with aboveboard tours when one returns to the mainland. Nor is that illegal in any way... nor does that "shift billions" inappropriately away from China. If it was so stupid it would be funny.
Actually, perhaps simply reflecting his lack of sophistication about how VIP works and the reality that VIP is now largely limited to the big operators, he does indirectly make the point that VIP is STILL running at 80% of last year's peak/record levels... not bad considering that roughly 100 smaller operators who have no funding and or have lost clients to bigger junkets and conversion to the "direct credit" stay and play premium mass bucket.
Same as for the seemingly endless barrage of stupidity that Unionpay cards have been used to inappropriately and illicitly divert funds away from China through the evilness of gaming in macau. Holy S stupid... The 14 idots using unregistered/unauthorized card swipers out of their trunks were arrested last summer -- along with confiscation of their $400,000 USD worth of money... that is hardly the "more than 25 Billion USD worth of gaming money Reuters reported last summer... a number repeated several times by Shuli Renn, James Detar, the dumbest of the analysts in this sector, and this Hong Kong Post paper that published the dumb #$%$ articles last week about the Fox Hunt.
The bs noise is played out here folks -- the smart money is taking up the shares being gifted down here.
Lee's hedge fund was one of the 11 of the to[p 15 holders that either added to or began a new position during the Sep Q. As pointed out prior, these guys (and several other fundamental/quant value funds) put these shares on between $37 and $26, and notably the stock did not drop below $27 until the last day of the quarter.
As p'ointed out a few times here, this stock won;t be a technical buy until the stock pivots back above the 200d ema in the low $30s on heavy volume, but fundmental and quant guys -- and MPEL itself -- are doing the buying on all shares the shorts and towel tossers will cough up down here, and by now the momo longs are all long gone, replaced by the "momo" short idiots who came late to the party. The quality replacement ownership is quietly taking off the hedges in recent days to maximize the upside on the reversal to higher levels.
Can it retest recent lows? of course... but good to see the hard bounce off the July 2013 low at $21 and MPEL still sopping up discarded shares down here. $200m or so remains on the first leg of the Company's buyback plan... great to see them use it hard to wet the back of the shorts' necks.
Icahn now has three henchmen on the board studying the business plan, financial modeling, and monthly financials. They also have full knowledge of the realities of restating prior period financial statements -- other than settling out at D&O policu limits on bs derivative class action suits, restatement down here is a big yawn.
Further, Icahn's personal choice of new CEO is in place now. Most significantly, Uncle Carl and his henchmen's original 13d (activist) filing revealed the day HTZ announced that they were going to further delay the equipment rental company spinoff and restatement for those financials, Icahn's crony group owned over 7% of the stock above $31 (including all of their option positions). That was followed by the other new 13D filer, Jana Partners, going from 3% at Sep 30th to over 7% in the mid $20s. Now, just last week per his filing, Icahn took his position up another 2,633,000 shares at a w ave cost of $21.36, bringing his aggregate position to 11.3% of outstanding shares (51,922,000+ shares) with a weighted average basis of $27.25 -- in line with Jana partners' basis.
So smart guys owning some 18% of total shares put on very recently with better than public info access have put up 84m shares --some $42.3B of fresh money on a big bet here. This stock is seriously oversold and ready to move higher throughout the run up into the equipment company spinoff and HTZ progress on merger synergies and revenue/ebitda growth.
Shorts are going to have their little padoinks slammed in the doorway from down here. Judging by the putzes posting drivel here dozens of times/day, it is about time.
As noted a few times here, this stock won't be a "chart buy" until the stock crosses back above the 200d ema on heavy volume, but the chart is suddenly looking constructive for those who can process what I wrote last week about the successful retest (rejection) of the July 2013 low last week -- not just for MPEL but also LVS and WYNN as noted then. These shares are up some 14% since as the buysiders pull hedges on the difference between "illicit money transfers" and Chinese law compliant VIP operations/money transfers and the quality/texture of Xi Jinping's scripted remarks endorsing Macau and encouraging further diversification. Those who are dialed in to MPEL's business plan and "best in group diversification of offerings" of Macau's Integrated Resorts understand MPEL is accomplishing Beijing's objectives better than any other operator on Macau; the cinematically-themed Studio City (phase 1) will be further transformational for MPEL, almost doubling MPEL's room count on cotai (and macau for that matter) and quickly become the pedestal example of new world order diversification.
More excellent news on was filed on the ongoing buyback program to reflect additional buyback activitiy on Friday. While Jinping was at the microphone, MPEL took in another 836,012 shares, bringing the cumulative total to 8,105,534 shares (ADS equiv) purchased over the last consecutive 11 days in a row. Great to see the two co chairmen/billionaires controlling some 68% of the outstanding shares make this statement about the future of MPEL and its stock... on top of the ~$100m repurchased last Q around $27/share, so far this Q they have invested another $200,000,000 of recent ebitda in the discounted shares....
Lucky 8s.... LOL
This dthe98 has been a "negative commentary only" comedian all along here, starting last year when he told us how China was going to collpase on providing stimulus (right when they were reining in bank lending and real estate development and imposing realty investment restrictions). He is one of the naysayers herewho didn't get the memo that Jinping is very supportive of macau and its value to itself, surrounding commercial development and china, and that, unlike Taiwan and Hong Kong, Xi is very supportive of Macau's new leadership and program ahead.
The only thing getting slammed in Macau during Xi Jinping's visit and commentary is those geniuses shorting the stock are getting their padoinks slammed in the door.
as you drill into the "crackdown with about a dozen or so new articles from around the globe, you'll quickly learn that the new regime has shut down internet broadcasting into China by Bloomberg, the Guardian, the NYT, and other reputable media outlets that have had the berries to point out just how hypocritical this "corruption crackdown" really is... comforting to note that despite all of that, at least the 15 or so largest VIP tours continue to game with about 80% of the aggregate $ played at peak... even if the real estate crimping (now being reversed on bank loosening and rate cuts as well as easing restricitons) and bank flexibility curbs put in place a year ago have essentially eliminated all of the marginal/smaller junkets.
Btw, did I mention that it is not "illegal" to transfer money to settle debts, or to transfer money within the established Chinese rule of law, or to settle debts with tour operator on the mainland, or to settle debts with the IR operators with funds from any of many possible other established banking relationships that elite wealthy Asians have set up with gaming establishments around the world?
How about an article recapping Xi Jinping's praise of things going well in Macau, including the very real efforts of companies actually doing MUCH to diversify Jinping's favored ideas on "diversification" in addition to casinos, incl entertainment, retail shopping, theaters (yes, see his press kit)... one can think of all of that as a tip of the hat to MPEL's business plans and unique entertainment offerings (COD's House Dancing Water, Studio City, retail mall overhaul, etc)...
There you go Shuli and Detar... write an article about that... just be sure to avoid talking about Xi Jinping's wealth or you will likely get shut down by Beijing as has happened to real media outlets.
At least 3 morons here continue to reveal how little they know about the "corruption crackdown" and Xi Jinping's desire to eradicate "corruption", particularly as it involves political figures. These same putzes continue to broadcast their ignorance about how VIP is permanently smashed (apparently they do not understand that still some 80% of last year's peak junket revenue is still happening in even the three worst/most recent months) and now adding in clueless comments like new "permanent anticorruption office" will forever shine intense scrutiny on things such as transferring money, bank account reveiws, and, OMG, Unionpay clearing accounts.
What a bunch of dog S.
Xi jinping has now made it abundantly clear, such that the buyside began pulling hedges last week, that what Beijing seeks to stop is the "illicit transfer" away from China of ill-gotten wealth. Here's the news these F head intern bashers and apparently their dip #$%$ HF mgr bosses do not grip: it is not illegal to play baccarat in Macau on legitimate junket tours. Reality: the "crackdown" is all about quashing airing of Xi Jinping and his family's wealth, eliminating dissension (stuffed HK tents and the umbrella brigrade who thought they would go to Macau to protest for Jinping), "Fox Hunting" and punishing enemies of the new regime (incl seeking extradition of the 100 or so political refugees from China now in the U.S., which the Russian press suggests is the U.S. being unwilling to send political enemies of Jinping to their execution in China) -- not about crushing
Macau, the Golden Goose.
"China's next president has amassed a fortune running into hundreds of millions of pounds, according to a hugely damaging new report. The revelation comes as the Communist party faces increasingly difficult questions about how its leaders, who are paid ministerial salaries of just £8,000-a-year, live such gilded lives"
goog the article and search "XI Jinping family wealth"
Through the close in China yesterday, MPEL has repurchased shares 10 days in a row, buying back a total of 7,269,522 shares. with a total value in excess of $175,000,000. How about those last four days at 895,000 all four days? We know 8 is a lucky number in chinese culture, and fun to point out that 7 of the 10 days of activity had "8" as the first digit of 800,000+ shares for the activity level. :)
As note on other threads, we pulled the WYNN hedge a while back and both the partials with MGM as the offset to the group takedown in recent days and have been back to 100% long MPEL since the idiots shorting pushed this down to the retest of the July 2013 low at $21. Just can't thank them enough for that chance to add to MPEL so incredibly dislocated as well.
What a prelude to Xi Jinping's visit today and MPEL essentially doubling its footprint with manila (right now) and Studio City (phase 1) in about 7-8 months.
Xi Jinping explicitly expressed "complete confidence" in Leung Val Tac as the new Finance Minister today. Imagine that...
The stock is up 13% since my post on this chart perspective two days ago... and gee, Xi Jinping hasn't said a peep about shutting down gaming yet. LOL
hope all the "cee unty" bashers here are having fun since. Getting their little heads caved in couldn;t happen to dumber awipes.
From the party recap this morning:
"...Amid a tune of welcome played by the Macao Police Band, the smiling president waved to hundreds of representatives from various walks of life and school children holding national flags and Macao SAR flags to greet him.
Xi told reporters at the airport that he was delighted to visit Macao again since his last trip to the SAR five years ago.
The president said he was glad to be here “to celebrate with Macao compatriots the festival of great historical significance and convey the good wishes of the central government and all Chinese people to Macao compatriots.”
Xi said he was willing to visit local residents, review with them the development of the Macao SAR over the past 15 years and discuss plans for Macao’s long-term development.
The president expressed his belief that Macao will progress in a more steady manner on the right track, guided by the “one country, two systems” policy and the Basic Law."
Jinping is also reported to have banned Umbrella there today, even though it is drizzling. LOL He has also expressed total confidence in the new regime, including Leung, the new Finance Minister of Macau.
Recall he is also interested to see the progress toward diversifying the elephant in the pink tut toward learning new dance steps (diversification) to have more entertainment, shopping, dining, MCE and other tourist/cultural attractions since his last visit [in 2009]... LVS (MCE stuff), MPEL (House of Dancing Water and soon Studio city, the cinematically themed IR, and WYNN (with the Palace's new coliseum and exterior 8 acre lake shades of Bellagio's lake on the Vegas strip) should put all three of those in fabulous position to garner praise (and seriously large table allocations)... as for the other operators there? Not so much in the way of "diversification" away from gaming.
good to hear from you grftt... we have also added here and as you can see, the dweeb hedge funds and their little multialias, intern "bashers" are back here. Good to see that as the squirm is likely just starting, and fun to note the shares MPEL and others (incl you and us) have been sourced by new algo sell program trades over the last two weeks. Matrixputz/blaqnite/idiotpumper/fcaunyc/fkuimbecile/sheetwise and whatever his other 5 or so aliases calling for $17 now is especially noteworthy, a siren at the successful retest of the July 2013 low at $21 as noted on another thread yesterday. btw, also covered in the offset short on MGM (again) late yesterday on the late drop (along with WYNN, our pair hedges for MPEL of late) -- the big picture is that all of these Macau names are washed out and while the nutty HF shorts can push them down while 13F players are hedging global events and even convince rags like the HK Post to publish bs articles like the one they did Monday, those who can think are on the buyside of the shorting/panic selling. We do not want to be short anything in the sector with the new Finance Minister coming in tomorrow along with Xi Jinping's visit.
Great trade on BABA. As you know, we ran yhoo from w ave $40 to $51+. Following that trade, we opened on BABA at $106 last week, a few days early in hindsight, but with a pair short on yhoo. Covered in yhoo yesterday, long a good slug of BABA anticipating a runup into earnings.
As you know, we've also minted on PCLN, EXPE and the airlines several round trips over the last few years. Pulled the box short on PCLN yesterday at $1050 and currently running SAVE on the bs drop last week (long at $68.50). Reloaded CAR at $49 (stupid cheap on cfo comments at conference) and back to long on HTZ and TRIP again as of yesterday -- like the gamers, just too cheap on bs shorting/hedging of late.
OT to gaming...
Lee was on cnbc today and commented on SD (less than thrilled and sitting on a big loss) and Atlas (which he is adding too)... but remember that Lee and his team certainly understand hedging downsides and likely have either boxed them or paired them against other names that have gone down with the group.
My partner flipped a small trade on the afternoon drop on BBG today (out with a mere 4% scalp LOL), but still early to play with real allocation and for more than a trade. Again, we'll be running the big cap E&P names if things go way off before this oil and gas collapse is over (today's short-covering rally in oil may prove to be a head fake... the Saudis are not playing bush league ball here).