Galaxy Entertainment’s purchase of 4.9 percent of Wynn Resorts is an indication to analysts that the company may have been waiting for the opportunity—perhaps about the time that the stock started plummeting. It is no secret that Wynn Resorts has suffered in the wake of harassment lawsuits and news about Steve Wynn. But, was the move a good one for Galaxy? Analysts at Bloomberg share details about Galaxy Entertainment, after the purchase of Wynn shares. The stock price movements are similar, as is the structure, balance, and style of the two casinos.
Both casinos are heavily relying on the VIP market. Wynn Macau and Galaxy Entertainment’s Macau casino are like Las Vegas casinos, getting attention for the details they see and the customer service they offer. However, there is one big difference— Americans own Wynn Resorts Macau, and Galaxy is a Chinese based company.
Steve Wynn let go all his stake, and that makes buying into Wynn a decent move for companies like Galaxy Entertainment. In fact, if Wynn was still at the CEO table, it is highly unlikely that Galaxy would have been able to get such a high stake in the resort casino. Wynn was not happy with several moves made by partners in the past and is not known for his tactfulness when it comes to Chinese involvement.
Wynn and Trump
Wynn was vocal about his support of Trump, who is also not very happy with selling things to China. Then again, Trump seems to be looking for trouble in just about any country.
Wynn at least kept a lot of the negative comments to himself, but he did make it clear that he does not appreciate Chinese involvement in American companies. But, perhaps he was trying to keep a low profile given the trouble that has come his way.
Allegations are still being investigated regarding his sex life and harassment at his Las Vegas-based casino. All the trouble seems like a beacon to Galaxy Entertainment who waited for the stock prices to fall after the allegations hit the media and finally decided to buy Wynn’s shares when he liquidated.
Wynn’s selling of his shares is something that was pressured. Although he has sold his entire shares, he sold 8 million to Capital Research and Management, 4.1 million on the open market, and to T Rowe Price. The 5.3 million shares Galaxy purchased with $927 million were up for grabs, indirectly of Wynn.