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Casino stocks plummet on Caesars Q3 investors call

Caesars has seen a rough few years for sure, after filing for Chapter 11 bankruptcy protection in 2015 in light of nearly five years of mounting losses, after a protracted fight with its creditors Caesars was able to emerge leaner but meaner, spinning off many of its assets but holding onto $2 billion in cash and announcing immediate expansion plans. Despite the optimism displayed earlier in the year, and a rise in revenue of 111% to reach $2.119 billion, on Wednesday Caesars warned investors that Q3 bookings were unexpectedly soft and offered guidance that Q3 would be essentially flat. Irrespective of assurances that Caesars was expecting a strong Q4, investors panicked pushing the stock down some 24% at one point before it regained about half the loss in later trading. The sell off also pushed regional casino stocks down along with it, with Boyd Gaming, who operates casinos in Las Vegas, Indiana, Louisiana, Iowa, Mississippi and Kansas among other states, Penn National Gaming, who operates casinos across the nation and Churchill Downs, who focuses on race track operations all down amid the melee. Macau underperformance further spooks investors At the same time, Macau released its regular revenue report showing a rise of 10.3% in total gaming revenues to hit $3.2 billion for the month of July. While the numbers showed the 24th straight month of year-on-year gains for the former Portuguese enclave and current Chinese autonomous region, investors were not impressed as the numbers missed the Bloomberg forecast of 11.5% growth.

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