WYNN Resorts Starts to Titillate. Black Swan Fluttering $WYNN

Wynn Resorts (Nasdaq:WYNN) and gaming stocks are starting to titillate traders. Earnings news has been digested and now we look to see if all boats are rising on the tide. First you need a generally improving stock market which should be the case for the next few weeks.

Then you need the momentum boys to start chirping which is starting to happen. The charts and technicals looking good they say.

No saying WYNN isn’t gonna run some. But here is the Black Swan Event WYNN needs to think about. Macau is the only Chinese main land location to allow legal gambling. The licensing fees increase over time and the capital cost continue to rise. Beijing will want to set up a competitive apparatus somewhere to keep foreign exchange in China and tap into a huge Chinese market that cannot readily access Macau, WYNN and others.

They may even be nice about it and offer the operators in Macau first opportunity. But it will happen sooner than later. The bastards in Beijing are not beholden to the SEC or any other western imperialist tools. They may even short WYNN and others before their announcement and start being profitable right from the get go.

WYNN’s Macau occupancy is now around 95% so even the simplest economic analysis points to expansion profits.  The current forward PE is around 19. How much bigger can the multiple grow?

The Chinese Black Swan will come out of nowhere. So if your trading, protect your self in all the usual ways. Stop loss, puts yadda yadda yadda.

WYNN is particularly vulnerable because it grew up in the Nevada fish bowl. they even have a Governor on the board. they are used to being part of the house that controls the house. Macau and China are not the same. In the mean time can it pop? You bet. and that’s what you are gonna do. Bet! good luck.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti   And now I’m off to check out this Chinese translation tool. Hmm

 

Las Vegas Sands $LVS Now Smoking But Where is Fire? Lots Accountants on Board of Directors.

Las Vegas Sands (NYSE:LVS) is looking for a new auditor. PwC (PricewaterhouseCooper) has had a very long running relationship of 25-year with Sands Chief Executive Sheldon Adelson finally threw in the towel in the nicest way possible.

The all important year-end audit is complete and they were working on Q1 which will be completed. But the new firm will have the rest of the year to find its feet and give the all important sign-off.

So why does a large reputable accounting firm resign from almost $9 million in audit, tax and other  fees. Las Vegas Sands had been subject to increasing regulatory scrutiny for money laundering and bribes.

Many point out that Mr. Adelson’s challenging demeanor and demands on the auditors led to a deterioration in the relationship. It sounds like Mr. Adelson has been difficult to deal with.

PwC finally got into the life boat and is rowing away. It also should be pointed out that Mr. Adelson has been vigorously financing his political views which may not have been appreciated in the current White House.

Lets take a quick look at the board. 8 independent directors. The average age of the board is 67 and average tenure is 7 years. There is an old guard who has been on the board along with Mr Adelson from 2004 some nine years ago.

The board has two individuals who have a background in accounting.

Irwin Siegel CPA and was the Partner in charge of Deloitte Touche specializing in the hospitality industry. Wow that guy should have a very good sense of what is going on. Chairman of Audit Committee

George Koo is currently a special advisor to the China Services Group of Deloitte Touche. He also headed the group up from 1999-2008. Hey he should also have a very good sense of what is going on.

Irwin Chafetz is an old loyalist former vice-president of Las Vegas Sands with background in Interface-Group and Comdex. Big factor in Mr Adelson’s past.

Charles Koppleman has been with EMI and Martha Stewart Omnimedia. He gets entertainment but probably not a heavy weight in accounting.

Victor Chaltiel who is a Franco-American business person who in 2011 ran for Mayor of Las Vegas. Conservative standard-bearer.

Charles Forman has a substantial background in trade shows and Comdex which is Las Vegas is important. Again a former connection with Mr. Adelson.

Jeffrey Schwartz who heads up Global Logistic Properties which trades on the Singapore Exchange. They are the largest platform of logistical facilities in Asia. Sits on Audit Committee. Las Vegas Sands won an important license for a casino in Singapore.

Jason Ader is the founder and CEO of Ader Investment a NYC based investment advisor and merchant bank specializing in hospitality and real estate. Formerly senior managing director of Bear Stearns and before that a vice-president at Smith Barney. (remember those guys they earned your business the old-fashioned way) He sits on the Audit Committee.

So who knew what and when. Victor Chaltiel is too new. The two Deloitte Touche Alum’s got some splaining to do.

Mr Adelson is reputed to be very wealthy. The value of Las Vegas Sands shares has fluctuated but Forbes had him down as the third richest man in the US and the sixteenth richest man on earth. The stock market does fluctuate.

Bottom line: Although board is saying there seem to be some improprieties it should not have reached the point where auditors are resigning and walking away from huge professional fees. Money talks and PricewaterhouseCooper took a walk.

The board is not strong enough and it came to an auditor resignation.

George Gutowski writes from a caveat emptor perspective.