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Whose Afraid Of The Big Bad WoLVS?

By Chuckmonster on Friday, 21st November 2008 5:49pm
  » filed under Las Vegas  comments: 1


Well... will ya look at that.

The monolithic Las Vegas Sands Corp - owners of Venetian / Palazzo / Sands Macao / Venetian Macao and a handful of other construction sites - has a lower market cap (# of shares outstanding X share price) than it's Macau pure play competitor Melco Crown Entertainment - owners of ONE currently operating, relatively out of the way casino in Macau (the fabulous Crown Towers, Taipa) and another, City of Dreams, scheduled to open in 1H 2009.

Call me crazy, but I can't shake this mashup of children's folklore - The Little Engine That Could (MPEL) the straw house from the Three Little Pigs (LVS), Little Red Riding Hood (Investors) and, of course... The Big Bad Wolf, who stars prominently in two of the three mash-ees and makes his appearance here as "The Economy."

Here we have MPEL, the little engine with a helluva paintjob, great service, great dining and an amazing sleeper car. The little engine stumbled at first, with a botched opening and cost over-runs - some said it would never succeed at such an odd location, specifically when tasked to lure in the highest of the high rollers. Slowly but steadily, the little engine showed that quality, coupled with surgical strike business sense, could.

LVS - seemingly strong from the phenomenal success of the Vegas Venetian hatched a plan to build the mostest and the largest casinos, the fastest in Macau. Dominate the competition not by playing better baseball, but by building a new field of dreams, an instant spectacle which they called The Cotai Strip.

Investors - the Little Red Riding Hoods - flocked to both companies at IPO, buying shares in each, eyeballing development plans, grokking early reviews, mulling numbers and grilling yours truly for the 'inside scoop.' With baskets full of Macanese egg tarts, muffins and daisies, they dreamed of nest eggs and sky-is-the-limit Macau casino growth.

"OOooooga Booooga! Aaaargh Red Riding Hood!!! Give me our egg tarts, muffins and daisies or I'll huff, and I'll puff and I'll blow your financial house down!" the Big Bad Economy Wolf growled. "Oh no you wont! The Chinese are addicted gamblers and the casino sector is recession proof! Take your credit market and begone!" Red Riding Hood responded. "AAAAARRRggh.... I'll huff, and I'll puff and I'lll BLOOOOOOOW YOUR HOUSE OF CARDS DOWN!"

Just then a mighty storm of epic proportions blasted forth from the mouth of the swirling beast, pointed directly at Red Riding Hoods holdings - the train that could and the Three Pigs' row of finished and unfinished thatched casino huts. First the train began to tip, wheel from rail, teeter-tottering precariously over the abyss where it found a mid-air, half-derailed balance point - half=tracked yet moving forward like a car stunt from a Burt Reynolds movie.

The thatched huts? They're mostly gone... scattered straws in the wind, being chased down by well dressed executives with Nevada plates.

As for Red Riding Hood, she was last seen at a 'gold party' plucking the buttons off of her crimson cape.

The Field of Dreams Principle - if you build it, they will come - isn't immune to Murphy's Law - anything that can go wrong, will - a synergy which proves the Peter Principle - in a hierarchy, every employee will rise to their highest level of incompetence.

Perhaps it's still 'too early' to say whether or not LVS' "build first ask questions later" business strategy was smart. According to millions of Red Riding Hoods - ie. the free market - the answer, measured in confidence via dollars, is clear:



Comments & Discussion:

After the government gets done with auto manufacturer bailouts, they can move on to casino corporation bailouts.

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