Recent sell off in Crown Resortsâ stock has carved out more than $824 million from the wealth of Australiaâs one of the richest men, James Packer.
Investor, Entrepreneur and former executive chairman of Crown Resorts, James Packer has been hit by the slump in Crownâs share prices as the value of his 46% stakes in Crown Resorts has been reduced to $3.7 billion. Mr. Packer holds substantial interest in the casino giant Crown through his family company Consolidated Press Holdings Limited.Â
Over the past three months to date, Crownâs stock price has fallen more than 15% as investors seems to be concerned about the headwinds from high-rollers Chinese gamblers ahead of US trade tensions. The overall casino and resort industry has been witnessing a slow momentum in the market specifically across Macau.
Las Vegas-based Wynn Resort which operates more than 70% of its business in Macau has recently announced that since last monthâs Chinese national holidays, the market has softened. The management advised that due to Golden Week holiday the VIP and premium business has been impacted in Macau resulting to loss of high rolling Chinese customers.
Investors fear if the downturn takes the shape of 2014 and 2015 market conditions when a corruption breakdown has pushed Macauâs casino revenue down by nearly 50%. But at that time Crown Resort reported strong growth in its international VIP business both at Melbourne and Perth as Chinese gamblers continued rolling the dice overseas.
Despite the current meltdown, the Chief Executive of Wynn Resorts has been of the view that the ongoing decline is temporary and the return of high rollers to the tables remains uncertain.
The expert analysts have estimated Crown Sydneyâs market share of more than 20% in VIP business and over 15% in total gaming business which could potentially hurt the rival Star Entertainment business.
Although Crownâs VIP turnover has pulled off 13% growth on pcp, it seems expectations of market experts have been hurt by the Crownâs Â first quarterâs trading update. But Crown continues to eye bull participants who are betting an upside movement in Crownâs Sydney project, notwithstanding the significant difference in state-based economic conditions between the Crown and its major rival Star Entertainment.
In todayâs trade Crown Resortsâ share price fell by 0.595% or $0.070 to close at $11.700 on 19 November 2018. The stock of Crown Resorts Limited (ASX: CWN) has witnessed a negative performance change of 3.84% over the past one year, however it today traded at a PE of 14.500 x with market capitalization of $8.01 billion.
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