Adelson casino empire hits a rocky patch
He is known the world over as the world’s richest Jew, casinos are the bedrock of his billions, now it looks as if casinos may also rock the bed. It all started in 1989 with the purchase of the Las Vegas Sands for $128 million. He scrapped the entire casino and built the very successful Venetian Hotel and Casino Resort but it looks as if he may have gone a bridge too far.
The current economy has shaken most casino operators and Sheldon Adelson’s casino chain is no exception. Stock prices have fallen to a new low and shares have taken a beating.
Casino operators are not generating sufficient income to service bank loans and restructuring of bank loans are the order of the day. Las Vegas Sands is the stock with the largest debt to earnings ratio and have announced that they will be looking for extra cash from an investment bank despite CEO Adelson’s generous cash injection of $475 million.
The casino industry is heavily reliant on loans from banks to see them through the current economic situation. This is very bad news indeed for investors who are dumping casino stock as fast as they can although it is certain that banks will not force any of the major casino operators to a Chapter 11 bankruptcy. Adelson at 74 does not seem about to give up, he still has major plans for Macau casinos which at this stage has not been as hard hit as the US casinos.