The developer of "The Walk" in Atlantic City apparently took its own advice and scampered away from talks that gaming investors hoped would culminate in the sale of part of all of Trump Entertainment Resorts Inc. (TRMP)-owned three casinos.
Two weeks ago, The Star-Ledger newspaper of Newark., N.J., reported that Baltimore-based private real estate company Cordish had initiated talks with Trump officials over the possibility of buying a casino.
In fact, it was noted that the $110 million Cordish development, "The Walk," would be conveniently located outside Trump Plaza Hotel and Casino. The news pushed the price of TRMP shares over the $8 mark.
That price went even further northward in the middle of last week when Trump Entertainment Resorts reported a 14% jump in profit for the third quarter of this fiscal year. The company said net income had risen to $6.6 million or $0.12 per share compared to last year’s $5.8 million or $0.19 per share last year.
The increase, it was noted, was accomplished even while the revenues fell to $281 million from last year’s $2.88 million. The decline, comparable to others being felt by New Jersey casinos, was attributed to increased competition from Pennsylvania racinos.
But the TRMP euphoria was short-lived. On Friday, the newspaper reported that Cordish had backed out of the negotiations after its financial backer Goldman Sachs, refused to move forward. Trump stock took an immediate nosedive, finally leveling off at $6.79 per share.
Actually, the price of the TRMP shares have been in a swoon since the company turned down an offer in June from casino executive Dennis Gomes. Reportedly, Gomes’s group had offered to acquire the company for $14 a share while Donald Trump was holding out for $21 per share.
Analysts have noted that Atlantic City casinos have lost some of their luster since the imposition of a partial smoking ban and the ever-growing competition from Pennsylvania and the other nearby states, Delaware and West Virginia, where gaming has expanded.
Gaming investors grew more concerned on Monday over the beginning of the biggest corruption trial in Macau since the Chinese enclave was separated from Portuguese rule in late 1999.
Ao Man-long, the former secretary for transport and public works, has been charged with 76 counts of corruption, including accepting bribes, laundering money and abusing the power of his office.
The charges have caused officials to focus on the gaming development in Macau and the involvements of successful real estate purchases by such gaming giants as Las Vegas Sands Corp. (LVS), Wynn Resorts Ltd. (WYNN), and Melco PBL Entertainment Corp. (MPEL).
According to government prosecutors, Ao, during his seven years in office, had amassed a fortune of more than $100 million.
THE INSIDER: A Kentucky state judge has struck down an exemption to a recent smoking ban provided to Churchill Downs, operated in Louisville by Churchill Downs Inc. (CHDN). The track will now have to make plans to curtail smoking at its facility.
In a recent poll, New Jersey residents favored a total smoke-free casino, rather than the partial ban currently in operation in Atlantic City.
Cash Systems Inc (CKNN) has received a multi-year contract renewal from an Indian casino in Minnesota.
Scientific Games Corp. (SGMS) says its subsidiary, Autotote Enterprises, has received a three-year contract to provide wagering services to the Oneida Bingo & Casino Resort in New York.
Shuffle Master Inc. (SHFL) announced its chief financial officer, Richard Baldwin, has resigned to pursue other opportunities.
After one year of operation, the Hollywood Slots at Bangor, Maine, operated by Penn National Gaming Inc. (PENN) has surpassed net revenue of $74 million. Also, the State of Maine has received $36 million in taxes while the city of Bangor has pocketed $3 million.