Investors in gaming companies that have presence in Macau found reason to take their profits and run on Monday morning following a report that gambling had slowed dramatically during the first six days of April in the Chinese enclave.
A report by Wells Fargo that average daily revenue in the Macau casinos had fallen 17 percent to 21 percent during the early days of the month caused shareholders to reduce their positions. The selling began in Hong Kong where the Asian subsidiaries of the Las Vegas-based companies fell by as much as 4.9 percent.
By mid-day, shares of Wynn Resorts Ltd. (WYNN) had fallen to $208.83 each. This was down from the 52-week high of $249.31 per share registered nearly two months ago.
Also hit hard was Las Vegas Sands Corp. (LVS) whose shares were trading at $74.91 each. The company’s 52-week high was $88.28.
MGM Resorts International (MGM), which has a 51 percent stake in its Macau casino, saw its shares trading at $23.72 each. The company’s 52-week high was $28.75.
Not located in Las Vegas, but whose ADR shares trade on the NASDAQ, Melco Crown Entertainment Ltd. (MPEL) was trading at $34.80 for each share, down from its 52-week high of $45.70.
Trading in Macau-related shares has been on a roller-coaster ride since the beginning of the year. Early on, the shares traded well when most analysts saw a continuation of the previous high interest in the casinos. That slowed when fear developed after the Chinese New Year celebration when gambling slowed a bit.
Many analysts suggested investors not worry and JP Morgan went further by reaffirming its “buy” ratings.
However, that attitude among investors changed rapidly Monday morning following the slowdown report.
Ray Poirier is the longtime executive editor at GamingToday.
Contact Ray at [email protected].