Bally insiders benefited from A's move, buying shares ahead of MLB vote
Bally's (NYSE: BALY ) insiders appear to have been buying into the previously-under-pressure stock ahead of Thursday's vote by Major League Baseball's (MLB) owners. The record paved the way for the Oakland Athletics (A's) to move to Las Vegas, where bookmakers operate the Tropicana.
The unanimous vote sealed the fate of the Tropicana and confirmed that the venerable Las Vegas Strip venue will be demolished to make way for a new MLB stadium to be built and operated before the 2028 season. In April 2021, Bally's acquired Tropicana's non-real estate assets from Gaming and Leisure Properties (NASDAQ: GLPI) in a deal valued at $308 million.
Ahead of Thursday's vote, Bally's top executives, including Chief Executive Robeson Reeves and George Papanier, president of the operator's land-based casino division, were bullish on the previously weak stock. From Nov. 3 to Nov. 9, 10 Bally insiders bought 81,500 shares of the regional casino company worth more than $760,000, according to Bloomberg data.
Reeves and Papanier jointly purchased 40,000 of those shares. Buying Bally stock on November 3 proved to be a smart move, with the stock closing at $9.32 that day and rising to $11.23 yesterday. The stock gained 21.93% last month but is still down 42% year to date.
A's move could boost Bally's
Now that Las Vegas has acquired an MLB team -- the city's fourth professional sports team and Oakland's second -- Bally's is considering what to do next with Tropicana.
We view this as a positive development as it provides clarity on BALY's plans for Tropicana following BALY's decision not to implement operational changes prior to MLB's vote," Macquarie analyst Chad Beynon said in a new client note wrote.
Bally's has a variety of options. It could build a new casino resort next to the new stadium, or it could sell the Tropicana's lease to another gaming company. The Gaming and Leisure Division will provide compensation to regional casino operators as part of the MLB stadium deal.
"We believe that overcoming this hurdle will now allow management to evaluate various avenues for redeveloping the property, which may include building a large resort, finding a partner, etc. We maintain our rating at this time, but overall we believe the Reinforcing a better position to deleverage and grow the business," Beynon added.
Other beneficiaries of Initiative A
Beynon has an "outperform" rating on Bally's with a $15 price target, which implies a 33.5% upside from the Nov. 17 closing price. Macquarie analysts also believe other strip operators will benefit from the A's move to Las Vegas.
The group includes the largest Las Vegas Strip operators MGM Resorts International (NYSE: MGM) and Caesars Entertainment Inc. (NASDAQ: CZR), as well as Golden Entertainment (NASDAQ: GDEN ) and Wynn Resorts (NASDAQ: WYNN ).
“Additionally, we believe this news is an additional catalyst for Las Vegas as a whole and will enhance the city’s entertainment appeal, which will benefit operators such as MGM, CZR, WYNN and GDEN, ” Beynon concluded.
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Source: www.casino.org
