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Handicapping What The Wednesday Wynn News Will Be

By Chuckmonster on Monday, 4th April 2016 7:39pm
  » filed under Las Vegas  comments: 7

   

Wynn Resorts sent out a press release today giving 48 hours notice of a special two-hour investor conference scheduled for April 6, 2016, eight days in advance of the Annual Meeting of the Stockholders on April 14, 2016

Wynn Resorts, Limited (NASDAQ: WYNN) will host an Investor Conference on Wednesday, April 6, 2016 beginning at 2:00 p.m. PT (5:00 p.m. ET) and concluding at approximately 4:00 p.m. PT (7:00 p.m. ET).

As far as I can remember, calling an investor conference at such short notice is not standard operating procedure. Most material events or news releases can easily be made by an SEC filing or press release. They generally don't require assembling the global executive team, notifying investors and scheduling an analyst call unless the issue requires extended explanation with opportunity for questions and answers.

What could it be? Excuse me while I get out the pea shooter and pick off a few possibilities:

1. Wynn Palace Cotai

There is no development more important to Wynn Resorts than the opening of Wynn Palace Cotai in Macau. Five days ago, Wynn Macau LTD noted in the filing of their annual report that they expect Wynn Palace to open in the first half of 2016. They left open the possibility that the property could be delayed to early in the second half of 2016, which is really only a week or two later.

In January, Wynn Resorts announced the delay of Wynn Palace from March 25th to June 25th due to problems with contractor CIMIC (previously Leighton) missing construction milestones. This delay was announced by SEC form 8-K filing.

A more extensive delay - for example, a 3 month extension to late September - would certainly be an event that investors would need to be notified about in real time. With the Wynn Macau board meeting having taken place last week, it is very possible that a larger delay of Wynn Palace Cotai was one of the topics they discussed. If Wednesday's event is about Wynn Palace, Wynn Resorts will probably file a "Report of unscheduled material events or corporate event" form 8K with the SEC before or immediately after the stock market closes.

2. Elaine P. Wynn

Also last week, Elaine Wynn filed suit in Nevada State Court to regain control of her shares in Wynn Resorts. In 2010, Ms. Wynn agreed to temporarily bundle her shares in the company with ex-husband Steve Wynn's in order to prepare for a possible takeover during the ouster of Kazuo Okada from Wynn's Board of Directors. Ms. Wynn, a founder of Wynn Resorts along with Mr. Okada and Mr. Wynn, was granted those shares as part of the division of their assets during their divorce.

Ms. Wynn's statement, alleges that Mr. Wynn failed to hold up his end of the 2010 Stockholders Agreement by not supporting her re-election to Wynn's Board of Directors.

2.1 Alleged Impropriety

Ms. Wynn stated in her complaint that Mr. Wynn was "accused of misconduct on Company property involving at least one Company employee that was sufficiently serious to cause him to make secret multi-million dollar payment." Ms. Wynn also claims that the misconduct and payment was kept secret from Wynn's Board of directors. Ms. Wynn also raised questions that Mr. Wynn and members of Wynn's management team "engaged in reckless behavior","punished dissent or inquiry" and that Wynn Resorts General Counsel Kimmarie Sinatra "aided and abetted the breach of Mr. Wynn's fiduciary duties and the intentional interference with contractual relations."

2.2 Financial Control

Some possible resolutions to Ms. Wynn's complaint have the potential to alter the recalibrate the ownership structure at Wynn Resorts, essentially flipping over their toybox.

If the 2010 Stockholders Agreement is declared null by Nevada State Court and Ms. Wynn's shares are reverted back to her control, Steve Wynn then becomes the third largest shareholder in his company behind two institutional investors. With a passive majority of institutional investors, Mr. Wynn's decreased stake and Wynn's relatively low stock price (it closed at $93.01 today) The Steve's ability to retain full control of his company could be put in jeopardy.

2.3.1 Deal

Deal: There is also the outside possibility that the Wynn's have reached an agreement regarding the 2010 Stockholders Agreement. This would probably involve a moving van full of cash at a steep premium to the current Wynn Resorts valuation.

2.3.2 No Deal

Wynn Resorts attempts to force a redemption of Elaine Wynn's shares at a steep steep discount, just like they did to Kazuo Okada in 2012..

3.0 The Unknown

The Steve in health crisis? Wynn Resorts in defensive partnership? A strategic investment? Alien Abduction?

Odds

I've been thinking about this for a few hours now and can't really make any definitive case against any of these options. Even Alien Abduction seems plausible given what has been going on.

My gut says that that Wednesday's metting is about announcing a delay of Wynn Palace Cotai. A lot of hopes are pinned on this property and any further . With the opening tentatively scheduled to take place approximately 10 week from now, it is just about time for Wynn Resorts to shit or get off the pot. They're probably getting off the pot and sooting investor fears is really really important.

My gut also says that this is about Elaine.

Heads it's Elaine, tails Wynn Palace.

Tails it is.



Tagged: wynn resorts   elaine wynn   wynn palace cotai   steve wynn   divorce court   macau   cotai   





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Comments & Discussion:

wonder if this ties in with panama at all..

My gut tells me it is something Steve thinks is good news, otherwise most everything could be a simple statement/filing. That qualifier, leads to a shareholder deal working out to what Steve thinks is his favor. It could be a Cotai opening date, but again good news, which would make this part of the marketing buzz (e.g. "On time! Hard Open 8:28pm June 28! Reserve Now!). A buzz would needed given Wynn's stock and potential battle for who is in charge.

The 2.1 is fascinating, but, short of Huey Longs famous "Dead woman or live boy" adage, I do not think the payment would be enough to be material nor a breach of fiduciary duty serious enough to warrant a public statement like this (then again with todays SEC...).

If I can offer a long shot, something with the Boston property/operation.

Another log shot-- board signed off on the golf course plan /new tower

I'm on Team 2.2
With maybe a little 2.3.1 or 2.3.2 thrown in for good fun.

Guess we'll find out soon enough

How about a bombshell series of announcements? Steve Wynn is selling his Wynn Resorts shares to Crown. Steve is cashing out of Wynn Resorts to personally purchase the Wet and Wild and Fountainebleau sites. He's tearing down the Fountainbleau to build a $5 billion version of Wynn Palace in Las Vegas.

Steve has always said that he enjoys building hotels more than running them. This kind of deal would allow him to build his masterpiece. Why waste his efforts on Boston? It's like repeating the same mistake he made in Biloxi, building a hotel that's too expensive for the market.

Geoff...Winner winner, chicken dinner!

Yup. Geoff wins!



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