Sunday, July 26, 2009
Macau's new Cultural Secretary gives a nod to the casinos
Looks like the shorts in these numbers rolled snake eyes!
Now I know I was in WYNN on April 2 (I said the shorts on the casinos were Wall Street's new cooler) at 27, out at 50 on May 5, and back in at 35 and change on May 26 before Obama decided to visit Vegas.
Thursday morning, I said it was time for traders to get back in the casinos that have the Macau IPOs. LVS was 10.25 and WYNN was 42 and change. So why another tout again instead of another "As advertised?"
Because I think this time, the market won't be able to contain the moves.
Last I checked, there was 70 million shares short in LVS, and 16 million shares short in WYNN.
Shorts think WYNN will stop at 50, and LVS will stop here. I don't buy that for a second. I retouting these names because I think WYNN goes to 66, and LVS goes to 17, on their "enterprise" value, which will be unlocked by the Macau IPO's and the market belatedly recognizing that Sand's Singapore casino will greatly help cash flow for LVS.
I also think MGM could spike to 12, as I believe negotiations with the NJ gaming regulators regarding Pansy Ho, could soon receive clarification. (I'm long the 7.5s, 9s, and longer dated 10 calls on this number. 12 is just a stepping stone on the way to 22.)
The catalyst this time?
What analyst is bullish? But what person doesn't know that China is on fire? And what person soon won't know about Macau's new culture secretary Fernando Chui, who wants to smooth relations with China?
First step is changing the Visa restrictions on Chinese heading to Macau. Currently its once every two months.
Chui's first statement was this:
“The Motherland not only provides us with powerful backing, but also continuously injects dynamism into our development. I’d like to take this opportunity to extend my gratitude to the Central Government for its care and support for Macau.”
And I'd like to take this opportunity for thanking him on the shorts burial!
Posted by Palmoni at 7:40 PM