Casino operator Wynn Resorts had a bit of a roller coaster day on the New York Stock Exchange after rumors spread of a takeover bid by rival Las Vegas Sands.
Around 11:15am on Thursday, Wynn stock suddenly shot up 3%, hitting $108.60 per share, a peak the stock hasn’t seen since last September. But the rally began to fade at around 1:30pm and the stock closed out Thursday’s trading at $106.17.
Wynn’s stock surge came after a number of Twitter users began circulating rumors that Sheldon Adelson’s Las Vegas Sands was mounting a takeover bid of his frenemy Steve Wynn’s company. Sands was reportedly preparing an offer in the $120 to $125 range, with the latter figure representing a 19% premium on Wynn’s Wednesday closing price.
But a Wynn spokesperson subsequently told Bloomberg News that there was “zero truth” to the rumors, prompting much speculation as to where the chatter originated, and how much of it was intended to artificially inflate Wynn’s share price to benefit some day traders out to make a quick buck.
STEVE WYNN V. JAMES CHANOS ROUND III
Meanwhile, Steve Wynn’s latest attempt to sue investor James Chanos for defamation got off to a rocky start this week. Wynn is appealing a 2015 US District Court ruling that dismissed (with prejudice) his defamation complaint against Chanos. On Tuesday, a three-judge panel of the Ninth Circuit Court of Appeals expressed further doubts regarding the strength of Wynn’s legal arguments.
Wynn sued Chanos in 2014, based on comments the Kynikos Associates fund manager made at a UC Berkeley panel discussion. Chanos told the audience of journalism students that he’d reduced his holdings in Macau casino operators – including Wynn Macau – based on his belief that common practices in Macau’s junket industry left casino operators vulnerable to charges under the US Foreign Corrupt Practices Act (FCPA).
Wynn accused Chanos of publicly accusing Wynn of violating the FCPA and the legal fight was on. But the courts rejected Wynn’s arguments, saying Chanos’ claims were clearly his opinion, not a statement of fact.
On Tuesday, Wynn’s attorney Mitchell Langberg argued that Chanos’ “failure to disclose the facts upon which that opinion was based, if those facts are to be assumed … you have committed a defamation.” Langberg claimed that “one of the foremost linguistics experts in the world” had suggested that a reasonable listener could conclude Chanos had defamed Wynn.
But Ninth Circuit Judge Paul Watford echoed the lower court’s view, saying he found “no defamatory meaning’ in Chanos’ comments. Watford also said Langberg’s entire argument “just reinforces my view that this is just … an expression of [Chanos’] personal opinion of what the level of risk is.”
It’s been that kind of month for Steve Wynn. Last week, he sold his 11k-square-foot, five-bedroom Bel-Air mansion for $16.55m, only $400k more than what he paid for the property just three years ago. Sucks to be him, doesn’t it?
