HedgeFundLIVE.com — In this morning’s rendition of HFL Ugprades / Downgrades I heard that a Credit Suisse analyst upgraded Las Vegas Sands (LVS) from neutral to outperform and put a $56 price target on the stock. I did a quick news search and saw that casino revenues in Macau rose 48% on a year-over-year basis, according to the Macau Gaming Inspection and Coordination Bureau, to a record 19.86B patacas ($2.49B).
I haven’t seen the Credit Suisse note but it very well may have something to do with this fact. The Chinese New Year was in February this year and last year so the comp seems to be apples-to-apples. Nonetheless, LVS stock closed down more than 6% today. This was thanks to a sneaky little paragraph in the “Risk Factors” portion of the LVS 10-K that was filed today. The paragraph went something (or exactly) like this:
Any violation of the Foreign Corrupt Practices Act or applicable anti-money laundering regulation could have a negative impact on us.
We are subject to regulations imposed by the Foreign Corrupt Practices Act (the “FCPA”), which generally prohibits U.S. companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or retaining business. On February 9, 2011, LVSC received a subpoena from the SEC requesting that the Company produce documents relating to its compliance with the FCPA. The Company has also been advised by the Department of Justice that it is conducting a similar investigation. Any determination that we have violated the FCPA could have a material adverse effect on our financial condition.
We also deal with significant amounts of cash in our operations and are subject to various reporting and anti-money laundering regulations. Any violation of anti-money laundering laws or regulations by any of our properties could have an adverse effect on our financial condition, results of operations or cash flows.
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