Venetian resort owner gets capital, but stock dives
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Casino giant Las Vegas Sands Corp., which owns the Venetian resort, today detailed the terms of a capital-infusion plan that will raise more than $2 billion to bolster the struggling company’s balance sheet.
But the firm’s stock has plunged again, as shareholders face up to severe dilution of their stakes. They also have to contend with signs of a battle in the executive suite.
From Bloomberg News:
Las Vegas Sands will get a $525-million investment from the family of Chief Executive Sheldon Adelson and plans to sell $1.62 billion more in shares to raise cash and avoid bankruptcy. The company needs the cash to avoid violating the terms of some U.S. loans and triggering defaults that may force it into bankruptcy. The company said Monday it will halt construction in Macau, where it earns two-thirds of revenue, to focus on a $4-billion Singapore project. ‘Between the $2.14 billion in capital Las Vegas Sands intends to raise and the $1.8 billion in development spending it will now forgo, it looks as if LVS will live to fight another day,’ Robert A. LaFleur, an analyst with Susquehanna Financial Group, wrote in a research note today.
But the stock was down $2.79, or 35%, to $5.21 just before noon PST.
Bloomberg notes:
While Adelson, 75, adds funds to the company, executives may be showing dissatisfaction with the way he’s running it. In a regulatory filing Monday, Las Vegas Sands said it set up a board committee to address ‘outstanding differences between our chief executive officer and other senior management members.’ The company also said the board was addressing a ‘loss of confidence by certain senior management members in the management of the company.’