Maddox says storm clouds will not hurt Encore
By JOSH RESNEK
China’s latest crackdown on the Macao gambling hub caused Wynn Resorts stock to plunge last week.
For several months, Wynn stock had been hovering in the $100-$110 per share price range.
Last week, its stock price dropped into the mid-$80s, where it remains this week.
Fears of tighter regulations always serve as a downward jolt to Wynn stock prices because their Macao properties represent 75% of the gaming, entertainment, and hotel industry giant’s revenues.
Chinese authorities began a 45-day public consultation earlier this month. The action is all about rebidding for licenses that expire next year.
Maddox said the latest crackdown won’t put shareholders at risk.
This is what Maddox told television stock guru Jim Cramer.
Maddox said the changes China is proposing are not punitive but are practical.
“They’re designed with the health and stability of Macao. They will likely make Macao as regulated as Las Vegas is in the United States, Maddox added.
Maddox indicated that gambling and tourism are on the rise again.
Encore in Everett has had back-to-back strong months of gaming revenues.
Month to month figures for July and August were $59 million and 57 million respectively.
The Encore Hotel has reopened for seven days a week, guest accommodations are only partially open after not being open at all for a series of months during the pandemic.
During the pandemic and in the months following the reopening of the casino, Encore has kept up its aggressive management of the facility, sparing no money to keep the place sparkling.
The floral arrangements at the entrance to the hotel are dazzling.
The outside grounds are a spectacular combination of high-quality gardening with exotic plantings and mature trees.
The deaths of thousands of fish in the small harbor leading up to the Encore property was disquieting but the worst has apparently passed.
Wynn Resorts stock price on the NASDAQ: WYNN remained in the $85-$88 nexus this week.
The company’s market cap, that is, the value of all its stock, is in the $10 billion range.
The stock’s 52 week low is $67. The 52-week high is $143.
The pandemic hurt Wynn’s earnings dramatically.
Revenue through June 2021 was $990 million, up 1,055% over the year before.
Its net income came in at $131 million. Its earnings per share were -$1.15.
Casinos have the power to earn huge profits generated by strong revenue flows in the course of normal business periods.
The pandemic has put a crimp on this which remains today but is expected, over time, to disappear.