Golden Nugget Stock Peaks on Trump Rumor
Golden Nugget’s stock price hit a 52-week high Thursday after flamboyant financier Donald Trump was quoted as disclosing that he has acquired 4.9% of its stock and that he might seek to buy the Las Vegas casino operator.
A number of Wall Street analysts pooh-poohed the idea that Trump has any serious intentions of acquiring Golden Nugget, even though its stock jumped $1.625 a share to close at $13.50 on the New York Stock Exchange. No Golden Nugget executive was available for comment.
The news of Trump’s latest rattling of his takeover saber was in a Wall Street Journal story of a telephone interview with him from Monte Carlo. Trump said he acquired the holding two weeks ago, and his New York office confirmed that he holds a “small” Golden Nugget stake. The amount is just under the 5% level requiring public disclosure.
Atlantic City Casino Mogul
Trump is to become the biggest casino operator in Atlantic City, N.J., when his recent purchase of Resorts International is completed.
But he has no holdings in Nevada, where he became unpopular with officials when he threatened a takeover of the Bally Grand casinos early this year, only to sell Bally his stake at a price above the market.
In fact, Nevada was reacting to that deal--at least in part--when it enacted a law several weeks ago prohibiting “greenmail” of casinos in that state. Nevada also requires investigation and licensing of anyone seeking to buy at least a 10% interest in a casino there.
One of the Wall Street naysayers, analyst Harold Vogel of Merrill Lynch in New York, said Thursday: “I tend to think, if history is a guide, that Mr. Trump gets the pot all stirred up. Speculators big and small start to salivate and chase after the stock. Then, within three months, Mr. Trump announces that he has sold his shares at a handsome profit.”
Acting as Investor
And Marvin Roffman, an analyst for Janney Montgomery Scott in Philadelphia, said: “I don’t think he (Trump) will go after the company. I believe he is investing to make money.”
Golden Nugget itself made a major and ultimately unsuccessful takeover move against a big hotel and casino owner, Hilton Hotels, two years ago.
Recently, Golden Nugget, which last year posted a $12.4-million net loss, sold its Atlantic City casino to Bally for $140 million. Shortly afterward, it announced plans to build a $500-million hotel-casino resort complex on the Las Vegas Strip.