Carl Icahn Buys Caesars Stock, Minor Freak-Out Ensues
Multiple news outlets are reporting “activist investor” Carl Icahn has acquired a “sizeable stake” in Caesars Entertainment.
We are here to report this isn’t a huge deal, so chill.
Yes, Carl Icahn has acquired some Caesars Entertainment stock, but what other news outlets haven’t said is: “How much Caesars Entertainment stock did Carl Icahn buy?” We’re totally going to make you wait until after today’s awkward A.I.-generated image to find out the answer.
According to sources with intimate knowledge of the situation, Carl Icahn purchased about a 2-3% stake in Caesars Entertainment.
Expected something more dramatic? As we tell our lovers, learn to live with disappointment.
Specifics of the stock purchase won’t be publicly available until early August 2024. Had Icahn bought a 5% or more piece of Caesars, it would’ve been reported immediately. Since that’s not the case, it’s quarterly. We are a noted understander of stocks and equity securities and Schedule 13D requirements and the such.
For laypersons like you and us, 2-3% of a multibillion-dollar company represents a lot of money. Icahn invested between $154 million (two percent of the company’s $7.7 billion market cap) and $230 million (if he acquired three percent). For Carl Icahn, this stock purchase could’ve been made with the money found under his couch cushions.
The minor freak-out, of course, was driven by the fact Icahn has been a little cagey about how much stock he bought, as well as his history of activism.
Activist investors tend to throw their weight around more than the typical investor. They can pressure corporate boards to make decisions they feel will benefit stock value.
Back in 2018 and 2019, Tilman Fertitta (owner of Golden Nugget and Landry’s) proposed a merger with Caesars, but it was rejected. Eldorado Resorts entered the picture, and Icahn was pivotal in pushing that merger through because he owned a 9.78% stake (a far cry from the 2-3% he owns now) in Caesars.
Why doesn’t anyone ever talk about “close cries.” They’re always far. We can’t solve all the world’s mysteries on this blog, so moving on.
It’s sort of like how Elain Wynn gets her way at Wynn Resorts because she owns a 9% stake in the company. We were the first to share the rumor Blackstone could acquire her stock. (Wynn has been mum on the rumor, which we take to be a confirmation.) As with Caesars, Wynn’s stock is undervalued, hence the interest from investors.
As mentioned, some of the freak-out about Carl Icahn buying up Caesars Entertainment stock is related to whether the purchase means he’s looking to shake things up, but it’s clear he has no interest in doing that, at least not yet.
He has said, “I would never do activism in Caesars.” Never say never, but that’s a pretty strong indication Icahn just thinks Caesars Entertainment’s management is solid, aside from the questionable judgment exhibited by continuing to open Bobby’s Burger locations at its casinos (nobody’s perfect), and Icahn thinks the stock isn’t priced correctly.
What happens when someone with Carl Icahn’s financial girth lets it be known they’re making a substantial investment in a company? The stock rises. Caesars Entertainment’s stock price went up about 15% after his buy was widely reported.
Caesars stock has been down close to 25% in 2024, but it’s on the rise again following the chatter about Icahn getting back into the game again.
So, it’s all much ado about not much.
Caesars Entertainment CEO Tom Reeg and Carl Icahn have a long history of working together (going back to a $1.8 billion deal in 2018 involving Tropicana Entertainment), and Icahn seems to have a high degree of confidence in the direction of the company.
None of the usual asset sales, restructuring or management changes for which Icahn is known are anticipated.
The Vegas hot streak can’t last forever, but casinos continue to rake in revenue and there have been rumblings Caesars Entertainment could do some buybacks, a concept we barely understand, even with A.I. spoon-feeding us the definition.
Let’s just say Caesars has been aggressively trying to lower its $12 billion in debt.
Yes, the business side of Las Vegas is the most boring part of Las Vegas, other than the Healthy & Innovative Food Ingredients trade show, Oct. 28 through Nov. 1, 2024 at Mandalay Bay. Still, we love scoop, so suck it Bloomberg News, CNBC and Reuters.
It’s our town, everyone else is just borrowing it.
Leave your thoughts on “Carl Icahn Buys Caesars Stock, Minor Freak-Out Ensues”
1 Comment