In what’s proven to be its biggest stock plummet in nearly a year, Caesars Entertainment Corp’s offerings dropped by 11 percent on Tuesday, largely due to the trades failing to have rights to partake in its impending Internet divisions’ IPO, it seems. The day ended at $19.91 per share for Caesars, which signified the casino conglomerate’s biggest stock drop since November 14, 2012. Ironically, Caesars’ stocks have actually multiplied threefold since then, a reality largely related to its expansion plans vis a vis its online arm, along with a recent debt restructuring program to alleviate the pain of some the casino company’s $23 billion in redline debt. There may not be enough antacids or Lortabs to deal with this amount of pain, but they’re giving it their best shot.
Divide and Conquer
Caesars – which has created several subdivisions and spinoffs in order to reallocate funds more advantageously – did not offer Tuesday’s stock investors a shot at IPO rights towards their new oh-so-creatively named Caesars Acquisition Co., which will be the holding division for both Caesars Interactive Entertainment as well as two land casino properties: their Las Vegas Strip Planet Hollywood hotel and a $400-million Horseshoe that’s going up as we speak in Baltimore, Maryland.
But that doesn’t mean shareholders won’t have a shot at the IPO; those who decide to purchase stocks down the road will get a chance at partaking of the offering. In fact, it’s all part of Caesars plan to raise more capital (largely aimed at their new building projects, however, and not so much at debt reduction) by hopefully earning another $1.18 billion in total share sales before they’re done. Those who purchase shares will have a shot at one share of Caesars Acquisition stock for every share of Caesars Entertainment stock they own, we are told.
Did you know that Caesars is listed as a premier social casino gaming publisher? These guys get around more than cholera in the Ganges, it seems; they have more than one million on their Facebook free money casino page. And their little stock tumble didn’t have any impact on their third quarter status in this arena either; Eilers Research, a market research outfit, reported that Caesars Interactive held on to its #1 spot with a mere 15 percent share of this market, despite the stock drop. However, Caesars did feel a hit with a 7 percent falloff on its Facebook social casino game revenues, despite expansion in both mobile and tablet market sectors.
Some think Caesars’ massive debt load – by far the biggest in the casino industry these days – will get relief once the Interactive Division goes online in New Jersey come that state’s planned November 26 Internet casino roll out. Along with partner 888 Holdings, Caesars will continue to purvey its online brand; the company has already launched its Nevada Internet poker site, the second in the state to do so, following Stations Casinos’ Ultimate Poker site with Caesars renowned World Series of Poker (WSOP) brand for online players.
Caesars Entertainment Corp. owns and operates more than 50 casinos and hotels, as well as seven golf courses, under various branding significations.