Five years after Caesars Entertainment Inc. was purchased in the largest casino merger in history, investors are growing impatient with the corporation.
Since tiny Eldorado Resorts Inc. acquired the much larger Caesars in July 2020 and put its own management atop the combined business, the shares have lost over half of their value. Out of the four major resort chains in Las Vegas, Caesars has performed the worst over that time.
For a long time, Eldorado was known for its astute casino administration. Former high-yield bond analyst Tom Reeg, the company’s CEO, was credited with extracting profits from Eldorado purchases such as Tropicana Entertainment and the Isle of Capri Casinos. However, since Eldorado and Caesars merged for $17 billion, things have not been as good.
According to former Caesars executives and consumers who talked with Bloomberg, Reeg has caused the company to lose its direction. Unlike the local casinos that Eldorado mainly operated, Las Vegas resorts need constant advertising and reinvention. Some customers are upset that Caesars has increased rates while cutting expenses.
Sales are expected to rise by roughly 2% this year after peaking in 2023. There will be a decrease in profit.
Earlier this year, someone said on a Reddit board, “Caesars used to have an aura about it.” “The Palace was the location. It was the most lavish resort on the Strip in its prime.
On November 4, analyst David Katz of Jefferies LLC cut Caesars shares from buy to hold. He noted the need for the company to increase its investments in room upgrades and other improvements, as well as third-quarter results in Las Vegas that fell short of expectations and high rent levels at leased properties.
He wrote, “The path to upside is getting more complex.”
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- When did Eldorado Resorts acquire Caesars Entertainment?
Eldorado Resorts acquired Caesars Entertainment in July 2020 for $17 billion. - How has Caesars’ stock performed since the merger?
Caesars’ shares have lost over half their value since the merger. - What issues are investors concerned about with Caesars?
Investors worry about declining profits, reduced brand appeal, and rising costs. - Why did analyst David Katz downgrade Caesars’ stock?
He downgraded it due to weak Las Vegas results and a need for more investment in upgrades. - What was Caesars once famous for on the Las Vegas Strip?
Caesars was once known as “The Palace” — the most lavish resort on the Strip.
