LVS and their decision to float their Macau assets in a HK offering because their "failed effort" to sell its hotels and casinos last month is going to be a disaster for share holders today in LVS and in the HK offering. LVS is the most indebted of all the casinos and as we saw a few days ago, MGMs offering priced over 40% lower than the closing price that day. LVS is going to try to excite investors by thinking they are getting more out of the IPO than they will. When a company spins off a unit or business thru and IPO they are not getting all the capital/cash they day it starts trading. They will sell around 20-30% of the offering and will have to keep the remaining 70%. HK lock-ups are much longer than in the U.S. so will not see the rest of it for sometime. Also, this IPO will take months not weeks to get together. HK and global equity mkts up now but in a few months? Risk for IPOs then? They were unable to sell it off last month because bids were lower than they thought, but that is what it’s going for especially with upcoming open of City of Dreams MPEL new property (more competition). Last month gaming REV in Macau down 11%, and status on travelling visas a black hole. GS raised LVS today to a $8 px tgt from $5 but they are the ones hired for the process.. DUH. We have seen a cracking the market and every company and their dog subsidiary come with secondary’s. The MGM deal was bad and this has been the hottest sector lately (MGM also not as bad off as LVS). Check out these links:
http://www.ft.com/cms/s/1/cb1a2b48-4126-11de-bdb7-00144feabdc0.html
http://www.ft.com/cms/s/1/61842e28-397d-11de-b82d-00144feabdc0.html
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