"buying Revel and fixing the design"
Do you know what a spit-take is? I'd hate to have wasted this perfect demo I've just done.
AC is going to need 15-20 years to repair the damage that has been done to it. The governor of New Jersey needs to take every dollar the casinos are handing him and plant it right into the city. I wouldn't want Revel if it came for free; which it probably will. After all your complaining about debt, that's the last piece of property that anyone should be pointing to as investment grade.
Mohegan Sun is the only real competition for Wynn's Boston property from Europe to Las Vegas. They're panicked, and rightfully so. As for the rest in the region, you can put in all the racetrack slot parlors you want, everyone dropping nickels there will be dreaming of going to the Wynn when they hit the big one. The fact that there can't be a single casino within a hundred miles of Wynn's, and Wynn's is minutes from downtown in a big city, is an unassailable moat.
I just wish they'd give it a name already.
The 90% point is a good observation. The problem with it is that it's post hoc. If a 4% div is 90% of the profits persisently, the company would have to have lousy margins and expense ratios and be in a dumpy industry that has stagnated with the public and doesn't fluctuate with the economy. But in the case of this company, this is the _low_ end of the profit expectations. Forced restructuring in Macau is the reason it's happening. This is a temporary situation. Macau will settle down and WYNN will continue its role as a cash machine.
The debt is artificially inflated by the Okada note. The interest on that $2 billion is only 2% and the principal doesn't have to be paid off until 2022. I retain a suspicion that Wynn has a strategy to deny all of that money to Okada; at the least he'll roll it over to some sort of long term debt and make the expense gap shallower. The rest of the debt is at reasonably low interest and servicing it is handled easily by the operating profits with plenty left over for dividends. It's no more burdensome than your mortgage is.
What are the real risks? 1. Wynn will leave us, and won't have transferred his brain into a younger body. 2. Wynn somehow loses his touch and Wynn Palace is overbuilt and gaudy and the public makes fun of it instead of worshipping it. 3. That's it; that's the list.
Do you stop buying your kids xmas presents for 4 years when you take out a loan for a new car?
Wynn is paying dividends from profits from existing property while funding new construction with debt. The debt is creating assets of equal or greater value than the debt taken on. So there's no dilution at all, no Ponzi scheme, and nothing wrong with what the company is doing.
Why do this? Because debt costs are at historic lows. I'm thinking of getting a new mortgage on my house just to gamble the cash on volatility. Retail borrowing won't be this good for years, maybe decades, maybe ever again.
Oh, and they just flipped 7.75+% debt for 5.5% debt, cutting annual interest expense on it by about 30% ($40 million). Nice work if you can get it.
Did Encore destroy the Wynn? No? Huh. Let's see what else you made up.
Boston is not currently "well served," it's almost completely un-served, and is about to get a destination resort that's about 10 minutes from the airport or downtown. And it won't merely break even, it will be profitable.
There's no way Wynn Palace doesn't increase cashflow from Macau. Expect it to roughly double. The problem is that with the new, lower drop from VIP that affects everyone in Macau it won't be roughly double what it was a year ago. But the combined Wynn properties in Macau will still be generating significantly more cash than they were last year.
If Xi hated gambling, he'd have shut it down, not allowed it to expand. What he's said is that he wants Macau to improve its balance of development instead of just developing more gambling, for Chinese people to stop stealing from each other and using gambling to launder the money, and for the people involved to respect the law. And he's building literal bridges to Macau from Hengqin, Shenzhen, and freaking _Hong Kong_. Wouldn't you love to have a hater willing to build 30 miles of road with 20 miles of water crossings to get your best customers to you? I sure would. Much better than the trolls that tell lies about me here.
I'll agree, and I'm sure Steve Wynn will, too, that he was far too conservative about Singapore. Lesson learned. But if Sheldon is making his surprising numbers in Singapore because that's where he's shifted his Macau whales, he's going to lose that, too, because Xi is pulling them back from overseas. It would be nice to have a Singapore store pumping money back to the mothership, but it still wouldn't be the biggest in the chain.
In short, your pessimism is now better informed.
1. Good. Cancer is not a thing that any business should be causing in its employees and customers.
2. Minor change. On-floor smoking is already out.
3. How many businesses went out of business in the US when cities and states started banning smoking? All those bars whined that it was going to kill them. You know what it really did? At first, it drew traffic from neighboring areas that had no ban, as non-smokers love non-smoking facilities and are actively driven away from leisure activities by the presence of smokers. The absence of them creates an entertainment venue that has an environment conducive to enjoyment, which is the point.
4. The Chinese will soon stamp out smoking overall as the public health hazard and massive expense to the medical care system that it is. The fact that "everyone does it" won't mean any more there than it did here.
5. This is a call to short tobacco companies, not casino companies.
Learn to evaluate probabilities properly.
Looking at the historical prices, I don't think there's even a strong correlation, much less any evidence of causation. There are days with heavy or increased volume that are up and days with light or decreased volume that are down, and vice versa.
Your slanderous remarks mischaracterizing my posts are getting tiresome.
Growth is a rate. When you move the goalpost back in time, you lower the growth rate.
I have options expiring in January. Those especially are affected by the delay.
And of course my call would have been right without the delay. My call was dependent on a particular time period. All of this intervening BS is not relevant to that.
Except for the issue of government restrictions on importation of labor. That didn't even appear until the night before the ER. It's a secular change in the stochastic function. That's why it requires re-evaluating the prediction.
If you don't understand math or business, you should probably not be risking your money on it.
Walk-in traffic at Wynn and Encore is pretty weak. There's dead space to the north and west, so the only strollers are coming up from the Palazzo, if they even know which way to go to get to Wynn. Having a big, busy place, from which people will wander across the street to see the Wynn and LVS properties and points south, will help with that.
The point about rooms is valid; anything that increases capacity in Las Vegas has to be met by an overall increase in travelers to Las Vegas, or it's going to shave the entire town's REVPAR.
And the things that succeed should tell you that it's not the town that fails, it's the operators. City Center was built on economic projections that the mortgage-criminal industry had inflated, and Cosmo (Deutsche Bank and now Blackstone) is physically positioned to be the winner there, but Aria (MGM) is blowing it away. If Blackstone can put together a new casino team or contract it out, that could easily be reversed.
The moat in Boston is very strong, as is the drawing power from the entire East Coast, maybe even from Western Europe. Bumping up the design values only makes it more attractive as a destination.
The threat? New Hampshire, only half an hour away, could decide to allow a strip on the border. Depending on who thinks they can build a city (and some of them know they can), that would degrade the armor.
The real issue is the delay of Wynn Palace. I'm still recalculating what this company will be worth in January, but I'm not feeling confident about my $250 target any more. Like the man said, you can't predict what the Chinese government will do to you, you just have to listen quietly and do what they want.
"Any significant holders left months ago."
Blackrock just filed a 13-K notice of 5% ownership. Or did I read that wrong?
You did notice that, despite all this sturm und drang about Macau YOY numbers, this "nuttin" was a profit?
I was frankly expecting flat to a couple of pennies in the red. The analysts, many of whom haven't changed their "estimates" since they issued them after the Q3 CC, weren't. The company got closer to them than to me, though.
No change in my call.
AC is overbuilt and corrupt; Massachusetts has taken that as a lesson and instituted monopolies. New Orleans has its own attractions for people who like having fun, and, really, Harrahs? Ecch.
Boston has a couple of seasonally competitive sports teams, and then it has the Old North Church, and then it has the Science Museum, and then it has trying to survive other drivers on the roads. Past that, it is one dull town. Foxwoods is out in the middle of nowhere, and is the biggest casino in North America. It's really Everett's only competitor, and vice versa, and that competition is going to be heated. Everett is going to have no reason to rest. Boston will become fun to visit and to live in because of it.
It won't be Wynn's most profitable location, but it will be profitable.
It's efficient reaction to changing revenue structure.
The company is building a whole new casino in Macau, and another in Boston.
You want them to do something else to grow, you're going to have to redefine "grow."
Looking at the traffic figures, mainland visitors actually increased for December. It's the Taiwanese who appear to have either given up gambling or gone somewhere else. Either they like the newness of the Philippines better, or Sheldon did some hard-press marketing of Singapore. I'm guessing Philippines, and Universal is probably the one doing the poaching, possibly directly targeting anyone on Wynn's customer lists, which Okada could easily get hold of for a moderate bribe. If that's the case, he's going to find out that stuff goes both ways.
"Any Buy call on WYNN is always right and any Sell call on Wynn is always wrong."
That is correct. Because I'm not flipping in and out of this stock every day. Investors know where value is, and I have never made an investment in this stock that hasn't made money or won't eventually make money.
You keep on guessing and trying to keep above 50%. I'll keep on investing and stay at 100%.