Wall Street didn’t have a positive view of Thursday’s late-in-the-day announcement that Wynn Resorts Ltd. would pay $2.4 billion to settle a long-standing lawsuit with Universal Entertainment.
“The settlement reflects one of the core risks to Wynn shares after the stepping down of the (Chairman and CEO Steve Wynn),” Macquarie Securities gaming analyst Chad Beynon wrote in a Thursday evening research note.
Shares of Wynn climbed $10.70 on the Nasdaq Thursday to close at $179.11, the day after new CEO Matt Maddox discussed the company’s financial prospects following Steve Wynn’s resignation. Two long-serving board members said they wouldn’t seek re-appointment, signaling a potential shake-up.
However, Wynn shares were off more than $3 in after-hours trading follow news of the lawsuit settlement.
Beynon said the company’s operations in Macau “should be more insulated’ from any impact of the $2.4 billion settlement. Wynn’s Las Vegas casinos and the company’s $2.4 billion project under development in Massachusetts could be at risk.
“There is still risk that the company could lose a license in Massachusetts or face risk ahead of (the) 2022 Macau concession renewals,” Beynon said. “Unless the Macau concession is extended, in June 2022, all of the gaming operations and related equipment in Macau will be automatically transferred to the Macau government without compensation.”
As for rumors that other gaming companies might have in interest in acquiring Wynn Resorts, Beynon said the settlement “clears up one of many unknowns for potential buyers.”
