FOR IMMEDIATE RELEASE
Tuesday, April 19, 2016
Media Contact:
Bethany Khan ▪ BKhan@culinaryunion226.org ▪ (702) 387-7088
Red Rock Resorts' Second Class IPO: an Unauthorized Roadshow, presented by UNITE HERE
LAS VEGAS--Prospective investors in Red Rock Resorts (NASDAQ: RRR) are invited to join an unauthorized roadshow entitled “Red Rock Resorts: A Second-Class IPO” at 5 p.m. EDT/2 p.m. PDT on Thursday, April 21. A preview of the presentation deck is available here.
The critical review of this latest gaming IPO is being presented by UNITE HERE’s research department. The conference call and presentation will be hosted by Las Vegas-based researchers who have followed and analyzed Red Rock’s casino business, known locally as Station Casinos, for more than 20 years. UNITE HERE’s presentation will focus on questions about the insider deal at the heart of the IPO and the company’s growth prospects, including:
- Why would public investors pay 31x EBITDA to buy Fertitta Entertainment, whose only business is managing Red Rock’s casinos? Starwood Hotels, a worldwide management company, recently sold for 13x EBITDA.
- Why are the founding Fertittas taking so much cash out of Red Rock Resorts, if they are confident in the growth story? Cash payments to insiders from this offering and distributions to owners since 2013 total over $900 million, while the company has over $2.1 billion of long-term debt after the IPO.
- Why is Red Rock Resorts selling specially-zoned casino development sites in Nevada, if its core business is strong? According to data from the Nevada Gaming Control Board, the Las Vegas locals market has been contracting in terms of total amount wagered and number of slot units.
- Who should invest in this second-class IPO? In contrast to other recent IPOs, including one in the gaming industry, this IPO is not investing in the future of the company, reducing its debt, or funding expansion or acquisitions. Instead, it is buying an insider’s management company, and selling stock with second-class rights that will have uncertain dividend prospects.
You can find more analysis on the Red Rock Resorts/Station Casinos IPO Dissected website.
UNITE HERE represents 275,000 gaming, hotel and food service workers in the U.S. and Canada. UNITE HERE Gaming Research provides insights on the gaming industry from the perspective of those who work in the industry. UNITE HERE’s Culinary Local 226 and Bartenders Local 165 have a labor dispute with Station Casinos.
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