David Tepper, the owner of the Carolina Panthers, expanded the equity portfolio of Appaloosa Management, his personal hedge fund. The NFL franchise owner invested in two gambling companies, namely Las Vegas Sands and Wynn Resorts.
Appaloosa Expects the Share Prices to Go Up
Tepper’s investments in Sands and Wynn Resorts were the only new equity additions to Appaloosa Management in Q1. The hedge fund invested in the two gambling and hospitality companies in March, buying thousands of shares.
Official figures show that Appaloosa Management acquired 525,000 Las Vegas Sands shares and 225,000 Wynn Resorts. This was revealed in a 13F filing with the Securities and Exchange Commission.
Tepper bought the stocks at a decent price but his gambit depends on the recovery of the Macau gambling market. To elaborate, the two companies he invested in have a substantial presence in the special administrative region. Furthermore, Sands and Wynn Resorts’ incomes are both heavily dependent on profits from their operations in Macau.
The gambling sector in the region is currently struggling with the effects of the COVID-19 pandemic. Because of it, people from mainland China cannot visit Macau and play. Additionally, gambling in Macau is about to undergo some significant reforms. The local government recently vowed to combat shady junkets, which left a lot of people without a job and damaged the industry as a whole.
These unfortunate tendencies may soon change as concessionaires’ efforts to lift some of the restrictions will likely pay off. If they do, Appaloosa Management has a lot to gain.
Tepper Chose to Trust Sands and Wynn
This isn’t the first time Appaloosa Management has invested in gambling companies. A few years ago, it also had Caesars Entertainment stock in its equity portfolio. However, the Wynn Resorts and Las Vegas Sands shares are the only gambling stock the hedge fund currently holds.
Before 2018, it would have been controversial for an NFL franchise owner to invest in gambling companies. However, since the lifting of the sports betting ban, the sports and gambling industries have grown closer and are now regularly working together. Additionally, Tepper might have still invested in Sands and Wynn resorts even before the overturning of the PASPA, as he is known as a “contrarian” when it comes to equity.
The two gambling companies recently made investments of their own. A few days ago, Las Vegas Sands supported Bayes Esports – a young competitive gaming data company. Prior to that, the operator also lent its aid to StreamLayer, providing it with the funding necessary for a VEOS platform upgrade. Wynn, on the other hand, is currently renovating its Wynn Tower Suites property on the Las Vegas Strip.