By Jennifer Yousfi
Managing Editor
Money Morning
Las Vegas Sands Corp. (LVS) shares more than doubled yesterday (Wednesday) after Singapore’s government pledged support for the completion of a local $4 billion casino project.
Las Vegas Sands stock hit a daily high of $10.97, before paring back to close at $8.91 with an 80% gain of $3.96 each.
The Singapore Tourism Board stopped short of pledging financial support for the project, but said it would “facilitate the success” of the project under construction in downtown Singapore.
“The Singapore Tourism Board is monitoring the situation and is aware that the current uncertain economic climate may give rise to concerns,” the agency board said in an e-mailed statement, Bloomberg News reported. The tourism board said it was “working closely” with Las Vegas Sands’ Singapore unit, Marina Bay Sands.
Las Vegas Sands Chief Executive Officer Sheldon Adelson has been desparate to raise cash as his company’s shares have plummeted more than 91% year-to-date. The gaming industry has been hit hard by dwindling disposable income.
Las Vegas Sands shares have a 52-week high of $148.76, but prior to yesterday’s rise were hovering close to their 52-week low of $4.32.
Adelson has gone so far as to invest $475 million on his own money into the struggling casino company whose flagship properties include The Venetian Resort Hotel Casino (The Venetian), The Palazzo Resort Hotel Casino (The Palazzo) and The Sands Expo and Convention Center (The Sands Expo Center) in Las Vegas, Nevada, as well as The Venetian Macao Resort Hotel (The Venetian Macao) in Macao, China.
While the news of the Singapore government’s support certainly helped to boost Las Vegas Sands stock, some analysts believe the stunning 122% intraday surge can be attributed to short-sellers scrambling to cover positions after the stock’s initial rise.
A similar situation unfolded earlier this week with Volkswagen AG (OTC ADR: VLKAY). [Please click here for a related story in today’s issue of Money Morning on the recent Volkswagen share movements.]
“Gaming is a heavily shorted sector in need of a catalyst,” Todd D. Jordan, a managing director at New Haven, Connecticut-based investment-research firm Research Edge LLC, said yesterday in a note to clients, Bloomberg reported.
News and Related Story Links:
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Bloomberg News:
Las Vegas Sands Doubles After Talks With Singapore
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Online Casino Advisory:
Las Vegas Sands Owner Among Troubled Casino Billionaires