Caesars (Harrahs) going public

The stock starts trading this week (CZR) and CNBC is saying it will open between $8 & $10 a share. With the debt load they have and no Asian locations, I dont see much opportunity here. Anyone else?

That is a fair about no presence in Asia, which is where the big profits are. However, I would like to say that I owed Harrah's stock from about 1998 to 2001. In that time it did very well, I think the best stock I ever owned. Sometime after that they were no longer traded (what is the term for that?).

You also have to give them credit for their business plan of buying troubled properties at fire sale prices. Their casino in Punta del Este, Uruguay, I was very impressed with.

Sorry for being vague. Without looking at any specific numbers my hunch is that their stock is a good long-term buy.

Quote: Boz

The stock starts trading this week (CZR) and CNBC is saying it will open between $8 & $10 a share. With the debt load they have and no Asian locations, I dont see much opportunity here. Anyone else?

It's no wonder I can't get a slot machine to pay out here! Harrah's management is trying to juice their numbers ahead on the IPO.

Here is a link to a story about it. Most of what I have read is how small of a percentage of the company is being made available. I do believe the best thing they have going for them is brand loyalty and so many people from local CZR casinos think of them first when traveling to Vegas and other cities. They provide easy comp rooms, which is all many people see while missing the poor table game rules.

http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/02/02/bloomberg_articlesLYRNOO6JTSEC01-LYSA9.DTL

Hmmm, tough call. As a gambler, I really dislike Harrah's/Caeser's because of the (in general) terrible table game rules. But as a potential investor, I know the bad rules will pad their bottom line and the casual tourist won't know the difference.

I am not a serious investor, but given that we are (hopefully) coming out of this little recession, I have been considering putting some of my savings in the stock market. Probably better to just buy up an S&P500 index fund, but it's tempting to try to find individual undervalued stocks and buy them. I probably shouldn't give in to the temptation since I don't actually know what I'm doing.

Sooooo, CZR opens at $9 and, defying all reason, is trading at $16, up >70%.
Just goes to show that sometimes bad bets do pay off. Anyone want to claim they made this bet today ?
I sure didn't.

Quote: RaleighCraps

Sooooo, CZR opens at $9 and, defying all reason, is trading at $16, up >70%.
Just goes to show that sometimes bad bets do pay off. Anyone want to claim they made this bet today ?
I sure didn't.

I take the over on IPOs pretty regularly. It's almost a sure thing. I stayed out of this one, though - I already give CZR enough of my money:-)

LVS or WYNN are way better stocks to own in the space. The only question with CZR is when is the right time to short this stock. It will be under its IPO price by this time next year, IMHO.

Quote: RaleighCraps

Sooooo, CZR opens at $9 and, defying all reason, is trading at $16, up >70%.
Just goes to show that sometimes bad bets do pay off. Anyone want to claim they made this bet today ?
I sure didn't.

Heh. Only makes sense if you bought and sold your position today. I think the "buy and hold" investors will have a tougher time of it.

By the way, Sands is up from $1.99 to $50 a share since the depth of the bust in 2008. So there's a longer-term example.

No CZR shares available for shorting at my broker yet.

I trade and invest for a living..IMHO the offering was a joke. It was such a small raise (18-19MM) and was only floated to get the stock trading for the endless stream of secondary offerings likely to follow. There are absolutely no lock ups on the institutional holders (private equity and hedge funds) to sell stock. This is not a cheap stock but you wont be able to short it because there just isn't any out there to lend. The best bet is to wait until they trade options on it and buy some puts if you think its too expensive.

22BB in debt and no Macau exposure, I say stay away for now. If they actually start increasing cash flow and paying down debt then you could see a nice effect on earnings. 12x EBITDA is way to expensive for this company compared to say WYNN at 10.5x EBITDA

Bloomberg Article

I don't see any Put Options available yet, but those will come for sure. Lower risk way to play the downside of course you have to get the timing right :-)!!

I'm not an investor, and I only have a small working knowledge of how the markets work. I am, however, a Caesars player and know a bit about the company.

My gut feeling tells me they have something in the works and need a bit of cash flow to get that going. This company has gone private, then public, then back to private again. Perhaps they are looking at another buyout or merger (Boyd, maybe?) or the acquisition of some distressed properties (Isle of Capri). Again, this isn't based on any knowledge, but I guess I don't see any other reason to go public.

Bloomberg TV just ran a spot. We watch at work with the sound muted, but it appears that CZR is looking at selling some midwest/MS properties in order to finance a potential entrance into MA and/or FL. I'm not sure what to think about that. On the one hand, those are my favorite CZR properties. On the otherhand, they can't really get worse under new management.