Alliance Gaming Corp. (AGI) surprised both investors and gaming analysts late Thursday with the pre-announcement that rather than a profit the company would report a loss for the first quarter of its fiscal year that ended on Sept. 30.
Based on its financial review, the company said it would have a loss from continuing operations in the range of $0.09 and $0.14 rather than the $0.10 per share profit that was the average estimated by analysts that follow the company.
At the opening of trading on Friday morning, AGI shares fell some $4 per share to a low of $10.80 per share. By the end of trading, the shares had recovered a bit to $12.10 per share.
Not included in the operational loss was the $0.09 per share the company said it would take as a charge to reflect the $7 million judgment ordered by a jury in a patent infringement case against a former subsidiary.
The company blamed revenue weakness on its Bally Gaming subsidiary as well as expenses incurred in staff restructuring and the transition of its new CEO, Richard Haddrill.
"The transition to new CEO and President Richard Haddrill is now complete following the announced resignation of Robert Miodunski as an officer and director of Alliance Gaming Corporation," a company statement read.
"During the past 90-day transition period, certain aspects of the company’s operations have undergone substantial review, including completion of the organizational integration of the Sierra Design Group with Bally Gaming and Systems.
"As part of the new organization, the company announced the appointment of Robert Luciano to the position of executive vice president and chief technology officer."
Jeff Martin, gaming analyst at Roth Capital Partners, said he downgraded Alliance to "neutral" from "strong buy" and cut his price target on the stock to $15 a share from $22.50.
In Monday trading, AGI regained some of the earlier loss before closing at $12.64, an increase of $0.54 for the day.
Just when it appeared that Las Vegas’ growing Mexican community was going to have a casino with a Hispanic theme, Station Casinos Inc. (STN) on Friday moved in to end the planned development of the defunct Castaways Hotel/Casino on Boulder Highway.
An investment group consisting of Randy Miller, Rich Iannone and Rich Gonzales had agreed to buy the former Showboat Hotel/Casino from Vestin Mortgage Group the company whose $21.6 million was accepted by the bankruptcy court when former owners VSS Enterprises defaulted on their loan.
But the Castaways development obviously posed a competitive problem for Station’s Boulder Station about one mile south so the company bought out the controlling investment group for $12 million and then completed the deal by paying Vestin $21.6 million to have full ownership of the property.
As of Monday, Stations said it was still pondering the property’s future. They indicated that the casino’s configuration would have to be changed if it were to reopen in its current form. Among the possible options included selling it as a non-gaming property or even leveling the structure and building a new one.
Speculators had a field day Monday trading the shares of Riviera Holdings Corp. (RIV), although there were no official announcements from the company.
Shares had been trading in the early teens for the past few weeks but dramatically moved up late last week, rising to the high teens. On Monday, with 166,400 shares changing hands, the price of one share ended at $23.30, an increase of $4.77 for the day.
"The Riv has been on the auction block for many months," explained a knowledgeable source, "and it may be that one of the larger companies has finally moved into take it over. That land on the north end of the Strip is highly valuable."
Other major movers among the major gaming companies on Monday were Wynn Resorts Limited (WYNN) that was up $2.31 a share to $53.29 and Station Casinos Inc. (STN) which closed at $50.92, up $1.90 per share.
Looking to reduce regulatory concerns with its $9.4 billion acquisition of Caesars Entertainment Corp. (CZR), Harrah’s Entertainment Inc. (HET) has agreed to sell four casinos to Colony Capital LLC, the company that recently took over ownership of the Las Vegas Hilton.
Involved are Harrah’s East Chicago, in Indiana, and Harrah’s Tunica in Mississippi, as well, as Caesars’ Atlantic City Hilton and Bally’s Tunica.
Colony will pay $1.24 billion for the four properties. The privately held company already operates The Resorts Hotel/Casino in Atlantic City but will be making its first forays into both Indiana and Mississippi.
Residents of Northern Nevada are being given the opportunity to view the collection of art masterpieces owned by Steve and Elaine Wynn.
Fourteen paintings featuring works by Vincent van Gogh, Pablo Picasso, Claude Monet and others are being loaned to the Nevada Museum of Art in Reno. They will be displayed until March 30.
The Wynns, who plan to display the art works at their new Wynn Las Vegas casino beginning next April, paid shipping costs for the masterpieces and are loaning the collection to the museum for free.
Commenting on the move, Wynn said, "Because of their timely quality, great value and importance historically, I know from talking to other collectors that we don’t feel as if we own pictures. We never felt comfortable having them in the house, although it’s a dream to have them in the house."
Pollsters indicated last week that Michigan voters seemed prepared to require that any new gambling project must be approved by voters.
With 63% of those polled favoring the No. 2 ballot measure, it appeared that the anti-gaming measure would pass with ease. Only 27% said they opposed the constitutional amendment.
Exempted from the requirement would be Indian casinos.
The proposition was placed on the ballot to prevent the state’s racetracks from adding slot machines.
THE INSIDER: A $2 million upgrade has been announced by Penn National Gaming Inc. (PENN) for its Casino Rouge riverboat casino in Baton Rouge, La.
Multimedia Games Inc. (MGAM) has selected JCM American Corp. as its preferred supplier of bill validators.
International Game Technology (IGT) directors announced that they had approved a hike in the quarterly cash dividend to $0.12 per share from the previous $0.10 per share.