Wynn Resorts filed Securities and Exchange Commission Form 3 describing an initial filing of ownership exceeding 10% by billionaire Tilman Fertitta.
Owning 10% officially makes an investor a “business insider,” with greater authority and accountability.
The CEO of Houston-based Feritta Entertainment with its Golden Nugget casino brand, restaurants, and the NBA’s Houston Rockets is now Wynn’s largest shareholder, with more shares than Elaine Wynn, ex-wife of founder Steve Wynn.
Feritta increased his stake in the Wynn to 9.9% in November, up from 6.1% in October 2022. The latest Form 3 filing, announced late Monday by Wynn, lists Feritta with 10.9 million shares, with a right to buy 1,683,500 shares of common stock at $85.73; that expires on May 13. That amounts to 12.58 million shares.
Wall Street terminology describes a principal shareholder “as a person or entity that owns 10% or more of a company’s voting shares. Fertitta could try to influence the company’s direction if he were to convert from a 13G SEC filing to a 13D filing, which he has not done. Not all principal shareholders are active in a company’s management process.”
Principal shareholders are prohibited from short-selling the company’s stock or securities as stipulated under Section 16 of the Exchange Act, according to Investopedia.
Wall Street analyst John DeCree with CBRE previously suggested in November that Feritta wasn’t doing anything more than being an investor. The news media, however, have speculated about activism and a takeover attempt.
Wynn Resorts shares have been considered undervalued by analysts, who believe investors aren’t taking into account its $5.1 billion integrated casino-resort development underway at Al Marjan Island in the United Arab Emirates.
Bloomberg News reported in November that Fertitta is unhappy with the casino operator’s performance and share price.
Citing people familiar with Fertitta’s thinking, Bloomberg wrote, “Wynn management isn’t doing an adequate job communicating Wynn’s performance to investors and Fertitta thinks there are opportunities to expand the Wynn brand, particularly in the U.S, according to the people who asked not to be identified discussing the investor’s thinking.”
The Form 3 filing said the amount of common stock broken down so far includes 161,925 shares held by Feritta personally; 10,000 shares of common stock held by Fertitta Entertainment, Inc.; 6,863,324 shares of common stock held by Hospitality Headquarters, Inc.; and 3,864,751 shares of common stock held by Fertitta Entertainment, LLC.
“As such, Fertitta may be deemed to share beneficial ownership of the securities held of record by Fertitta Entertainment, Inc., Hospitality Headquarters and Fertitta Entertainment, LLC,” the filing said.
Fertitta is the sole shareholder of Fertitta Entertainment, Inc., the sole shareholder of Hospitality Headquarters and the sole indirect owner of Fertitta Entertainment, LLC. Hospitality Headquarters has entered into a share-option transaction, which at any time prior to May 13, may purchase from the counterparty the amount of shares disclosed at the price disclosed, plus a financing amount, “or may be obligated to purchase from the counterparty on May 13, 2025, the same number of shares at the same price, plus a financing amount.”
Such purchase is conditioned on the reporting persons obtaining clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976; otherwise, the share-option transaction will be settled in cash, “in which case Hospitality Headquarters will pay to the counterparty any decrease in, and receive from the counterparty any increase in, the market price of the amount of shares disclosed” during a period determined in accordance with the share-option transaction relative to the price disclosed.
Wynn stock closed at $90.15 on Monday, up $6.35 so far this year. Its 52-week high is $110.38 with a low of $71.63. J.P. Morgan recently released its price target of $117 for Wynn stock at the end of the year.
Wynn reported fourth quarter earnings on Feb. 13, with CEO Craig Billings touting a record-setting 2024 and strength in 2025 in Las Vegas. He said the gaming operator will continue to buy back its stock because the value won’t be recognized until after the Al-Marjan Island casino resort in the United Arab Emirates comes online in 2027.
