Caesars - 'Watch Listing' Nasdaq's Gaming Industry 'Drama Queen'
- Apparently, Caesars cannot, successfully, disassociate secured debt from the asset secured.
- The gaming industry and Las Vegas have been troubled in recent years, where Nevada was ranked a distant second in U.S. bankruptcies for 2014.
- Bankruptcies are nothing new to the gaming industry, as Donald Trump (2004 and 2009) can attest.
- Institutional and insider ownership, and the existing short interest, could make this stock a fun “watch list” addition in coming weeks.
- If you enjoy trading volatility, you will find this article of interest.
- On Thursday, Caesars finally announced it would file for bankruptcy.
- In the past, the company had printed off more shares, bought its debt at a discount, issued new debt, closed casinos, sold assets.
- However, as a result of several contested transactions, the best assets are now out of reach from CEOC bondholders. That has left the parent company open to substantial litigation.
- Caesars shareholders may think they are exempt from a bankruptcy at the operating company, but that might not be the case in light of the new information released today.
- In this article, I describe 5 ways Caesars' could lose its legal battles in bankruptcy court, which will eventually weigh heavily on its stock price.
- There are still many classes of bondholders, with deep pockets, that will vehemently oppose Caesars' proposed restructuring plan.
- CZR speculators are being naive in thinking they will get to keep their ownership when bondholders are getting wiped out. A judge is unlikely to enforce such an agreement.
- Caesars has told its shareholders not to worry, the bankruptcy filing will be limited to CEOC. However, this is wishful thinking; Caesars had no right to remove its parent guarantee.
- Caesars' corporate shenanigans amount to fraudulent conveyance and will be struck down in bankruptcy court, just like company with a similar corporate structure, Dynergy.
- Did you know Caesars has more debt than the country of Cuba or the city of Detroit?
- And by most accounts, Caesars has an even slimmer chance of paying its creditors back in full!
- Three cases against the company for fraudulent conveyance are now before the courts.
Analyzing Caesars: 6,554 Words On Why This Company Is A Short
- The market overestimates the value of Caesars' assets ex-CEOC.
- The market underestimates the liability the company will incur, should its bankruptcy plan be approved.
- The market overestimates the chances Caesars' plan will be approved.
- In the best case, CZR is worth about the level at which it trades, but in the vast majority of cases, it is worth far less.
- Two law firms have suggested that the Caesars deal is inequitable.
- Some very crude measures, based only on recent market reactions, suggest that some inequitable conditions might be present in the proposed deal.
- I do not believe that this deal is doable, at least not in its current form.
- CZR needs to "sweeten" the deal for CACQ shareholders.
- If not, that is also okay - CZR can "gamble" on alternative financing options.
Render Unto Caesar The Things That Are Caesar's... And Begin With The Debt
- Caesars Entertainment Corporation (CZR) wants to buy affiliated Caesars Acquisition Company (CACQ) to facilitate their Chapter 11 reorganization.
- Prior to this announcement, on December 12, CZR stock price dropped, when they failed to make an interest payment on debt.
- After the proposed merger announcement, on December 22, CZR stock price recovered, and continued to track with the stock price for CACQ.
- A December 22 announcement followed, expressing concern that the 0.664 shares of CZR for CACQ were inadequate.
- The December 22 challenge has merit, and appears to be good for CZR and bad for CACQ.
Caesars Is Headed Straight For Chapter 22 Bankruptcy
- The best time to short Caesars is now, before the hype dies down and investors face cold hard facts.
- A 2015 bankruptcy is likely the first of many, unless it drastically improves operating margins.
- The company needs to do more than just restructure its debt.
Caesars - Short Or Buy Puts Before Chapter 11 And The "Institutional Dump"
- Caesars is headed to Chapter 11 under the Singer plan or the Caesars plan.
- Approximately 58% of the shares are held by institutions.
- Fundamental measures are horrible and include a negative book value of ~$28 per share and $23B in debt.
- Second lien notes are trading below 20 cents on the dollar and 37% of the float is already short.
- While all Chapter 11 fact patterns are different, if you want to initiate some form of short position in Caesars, do not wait for the Chapter 11 announcement.
From $16 To $60? Where's The Magic Wand For Caesars?
- Despite debt woes, Caesars could be a buy.
- Now's the time to buy Caesars.
- Fundamentals in a post bankruptcy strong.
- Leaner, meaner Caesars will thrive.
Caesars Up 18% After-Hours On Proposed REIT Structure
- Caesars has proposed a plan to turn its largest operating subsidiary ("CEOC") into a real estate investment trust ("REIT").
- The stock shot up 18% after-hours on the news.
- The market appears to place more value on CEOC as a REIT than as an operating company.
- Whether bondholders agree to the new structure remains to be seen.
- Caesars announced widening net losses during its Q3 earnings report.
- Caesars announced pre-arranged bankruptcy for its largest operating subsidiary, potentially shedding $20 billion in debt.
- Short-covering caused the stock to rise 23% and 21% on November 12 and 13, respectively.
- Shorts are getting cooked and with 15 days to cover, it will probably continue for a few more trading days.
- I own straddles on the stock.
- Caesars' Q3 losses increased in comparison to the year ago period.
- The stock surged 23% after management announced a potential bankruptcy filing for its largest operating subsidiary - CEOC.
- If it can also offload CEOC's $20 billion long-term debt, the parent company's value could rise further.
- The stock remains highly speculative.
- Despite its well-publicized problems, Caesars posted a small revenue gain over the past year.
- Caesars is shutting down its money-losing casinos in the South and Atlantic City.
- Caesars TTM revenue is still higher than that of Wynn Resorts.
- Caesars still possesses a great portfolio of Las Vegas resort properties.
- Casino revenues in Las Vegas have increased by 7.2% since 2007.
Caesars Bringing Senior Lenders To Bargaining Table, Stock Soars 13%
- In early October Caesars' second-lien bondholders filed a notice of default.
- Caesars has 60 days to cure the default or be forced to pay off about $3.7 billion in second-lien debt.
- Friday the company started formal negotiations with first-lien bondholders to pare its debt.
- Bankruptcy, which could result in dilution to equity holders, appears imminent.
Have Caesars And Leon Black Been Checkmated By Second-Lien Bondholders?
- Caesars' major shareholder, Leon Black, has been playing a chess game to restructure Caesars' debt, while maintaining control of the company.
- Second-lien bondholders of $3.7B in debt, filed a default notice claiming Caesars pledged collateral to senior creditors without giving them similar claims.
- Caesars has 60 days to take action to avoid such default.
- Next for Caesars could be repayment of $3.7B in debt or a restructuring leading to bankruptcy or substantial equity dilution.
- Caesars remains the short of the year.
Caesars In Restructuring Talks, Debt For Equity Swap Could Be Highly Dilutive
- Caesars and its subsidiary, CEOC, are in formal talks with first-lien bondholders to restructure $6B in debt.
- Caesars has transferred significant assets from CEOC to other subsidiaries, including CERP and Caesars Growth Partners.
- First and/or second-lien bondholders will most likely ask that Caesars unwind these transactions prior to any restructuring.
- Given $24B in debt and an enterprise value of $12 - 15B, a restructuring will most likely result in a debt for equity swap.
- Caesars' equity is worthless and any debt restructuring will be highly dilutive. Caesars is a short.
- At 8x-10x LTM0614 adjusted EBITDA, Caesars stock is worthless.
- As the market factors in Caesars' $24 billion debt burden, the stock's trading value ($12.05) and intrinsic value ($0) should converge.
- At sell-offs of 60%-70% in the shares, the January 15, 2016 puts at a $10 strike price would deliver returns from 90%-130%.
- Casino revenue in Atlantic City has declined over 8% annually since 2006.
- Caesars' recent closing of Showboat Casino is the third casino closing in Atlantic City this year.
- Investors should avoid MGM and Caesars based on exposure to Atlantic City.
We currently have no Breaking News on this stock.
CZR vs. ETF Alternatives
Caesars Entertainment Corp is a casino-entertainment provider. The Company's business is mainly conducted through its wholly-owned subsidiaries, Caesars Entertainment Operating Company, Inc. and Caesars Entertainment Resort Properties.
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