Wynn Resorts: A Shake-Up in the Vegas Scene
Stock Market Mavens: Elaine Wynn's Passing, MGM Resorts' Hornbuckle, Rising OSB Taxes
Let's dive into the latest happenings at Wynn Resorts, shall we?
Jefferies' David Katz Weighs In
In an April 20 note, Jefferies' David Katz addressed the passing of Elaine Wynn, which raised questions about her stake in the company and the standstill agreement implemented post-Steve Wynn's departure. Katz believes the increased stake of Tilman Fertitta and associated entities, now nearing 11%, demands attention from investors regarding the future of Elaine Wynn's shares, Fertitta's plans, and the long-term ownership structure.
Katz suggests that the set-up offers several benefits, considering the historically low valuation at 8.7X EBITDA, the inherent asset value (including the land bank), and the company's strong operational performance.
Bill Hornbuckle's Remarks at East Coast Gaming Conference
Barry Jonas of Truist Securities attended the East Coast Gaming Conference in Atlantic City, where MGM Resorts' CEO Bill Hornbuckle shared insights. The CEO acknowledged the resilience of the gaming industry during economic downturns, pointing out that none of MGM's regional properties saw a decline (not even Vegas, which boasted 82% occupancy rates during trough levels in 2008).
Hornbuckle also discussed the shift in Macau's market landscape due to COVID, highlighting the rise of premium mass and MGM's capture of mid-teens market share. He also touched upon development efforts in Japan, estimating the market size at ~$30 billion, with MGM planning to commence construction later this month. Thailand is another market on MGM's radar, thanks to its size and low cost of construction and labor. Domestically, Texas doesn't seem to be making much progress, while MGM hopes to transform the Yonkers property into a table games facility "in the near future."
OSB Tax Hikes in Ohio and North Carolina
Jefferies' David Katz also looked into proposed online sports betting tax increases in Ohio and North Carolina. Ohio recently dropped a tax hike on OSB from 20% to 40% due to a revised budget, offering a reprieve for the industry. In contrast, North Carolina's budget proposal aims to increase the OSB tax from 18% to 36%, which has passed the Senate but faces uncertainty in the House. If passed, this increase will take effect in October. Keep an eye on both Ohio and North Carolina for developments on their tax policies.
The Wynn Resorts' Ownership Shuffle
Following recent developments, Wynn Resorts' ownership structure is undergoing a notable shake-up.
Tilman Fertitta's Rising InfluenceWith the acquisition of additional 400,000 shares during the stock's 52-week lows, Fertitta now holds a substantial stake despite the exact percentage being unspecified. His strategic, long-term commitment to the company, which is held through multiple entities, raises questions about potential operational changes or board influence.
Elaine Wynn's Former SharesAt the time of her passing in April 2025, Elaine Wynn controlled ~8% of Wynn Resorts' shares (reaching co-founder Steve Wynn's level). Since Elaine Wynn's shares are now part of her estate, it remains unclear whether her daughters Kevyn and Gillian Wynn Early, or charitable donations, will be the recipients.
Of the remaining ownership, institutions likely hold the majority, while Steve Wynn has no shares post-2018 exit. The company's recent $2.4B financing for its UAE resort project might influence future ownership dynamics should equity offerings occur. Keep an eye on these changes for an intriguing turn of events!
- Despite being unspecified, Tilman Fertitta's acquisition of additional shares during Wynn Resorts' 52-week lows attributes to a substantial stake in the company, raising questions about potential operational changes or board influence.
- In the aftermath of Elaine Wynn's passing, her former shares (approximately 8% of Wynn Resorts' shares) now part of her estate leave unclear whether her daughters or charitable donations will be the recipients.
- Wynn Resorts' casino-and-gambling sector is facing flux, with the ongoing ownership shuffle, specifically Tilman Fertitta's rising influence and the uncertainties surrounding Elaine Wynn's shares, which could impact the company's long-term plans and operational strategies.
