So has the selloff in the gambling industry gone too far. At least for a week the industry had a nice snapback that’s carrying through sharply today. Actually, it’s been wild. On Tuesday afternoon, shares of Las Vegas Sands hit a low of $4.32 — right now they’re trading above $15. Wynn is up 30% today to $61, whereas Tuesday they were below $30.
Factors fueling the rise — there’s more to the gambling industry than just Vegas (remember, people will still play slots in Detroit) and financiers internaionally are still willing to fund (some) new gaming investments. Chairman Steve Wynn expressed optimism on the company’s quarterly conference call that we might be at the bottom for this industry:
This is like after 9/11. Cable communication and all the rest exaggerate. Everything is hyperbolic. Everything is exaggerated. Everything is a big story of the moment and in this particular case we have reality that is tough enough and then when you amplify it with all of the news sources and all the talking heads and all the people who think they have a right or weigh in on the subject, not to mention the rhetoric of the campaign, all of this…if the public isn’t jolted then the public is totally immune to being jolted. So I don’t take the results of the last few weeks to be indicative of the future. Not to minimize the liquidity problems that face very important sectors of our economy, in terms of the consumer spending I think what we are seeing now is almost a freeze and like a muscle that is flexed you can’t hold it for very long. People will relax and return to their habits sooner, I think, than later.
That is not to say I think revenue is going to sky rocket or go through the roof or return to other levels, but I think right now Las Vegas is seeing pretty much some of the worst of it.
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