A key feature of the Red Rock IPO is the use of proceeds, plus additional debt, to acquire Fertitta Entertainment for $460 million in a related-party transaction. Investors should ask the company how it arrived at and agreed to this price.
https://www.rrripodissected.org/wp-content/uploads/iStock_000079692043_Small.jpg512937Ken Liu/wp-content/uploads/stationipodissected7.pngKen Liu2016-04-18 19:35:012016-04-22 05:52:29More Questions about the $460-Million Valuation of Fertitta Entertainment
Did Fertitta Entertainment provide audited financial statements with an unqualified opinion by its auditor after it agreed to be acquired by Red Rock? If it did not provide audited financial statements, how did Red Rock’s auditor handle the inclusion of Fertitta Entertainment when it produced the audited consolidated financial statements of the Station Holdco holding company?
https://www.rrripodissected.org/wp-content/uploads/iStock_000025608017_Small.jpg565850Ken Liu/wp-content/uploads/stationipodissected7.pngKen Liu2016-04-18 18:50:522016-04-22 05:56:10Questions about the Audited Financial Statements of Red Rock Resorts
Investors should ask Red Rock Resorts/Station Casinos and its IPO underwriters: Why is the company selling valuable casino sites? Where will growth come from if the company is selling off future casino sites? Do the Fertittas and other executives of Red Rock have confidence in the company’s core Las Vegas locals business?
We sent a letter to Nevada Governor Brian Sandoval regarding the Station Casinos/Red Rock Resorts IPO to provide the governor with “specific examples of problems related to the approval of the Station Casinos/Red Rock Resorts IPO by the Nevada Gaming Commission on January 21, 2016 in order to illustrate the challenges Nevada faces in regulating a ‘too-big-to-regulate’ significant owner of one of the major gaming companies in Las Vegas.”
There has been an increased focus on the corporate governance structures that boards implement leading up to an IPO. We have criticized the corporate governance of Red Rock Resorts, Inc. since its IPO was announced last October (and when it was still called Station Casinos, Inc.).
https://www.rrripodissected.org/wp-content/uploads/conferenceroom_Small.jpg565849Ken Liu/wp-content/uploads/stationipodissected7.pngKen Liu2016-03-09 01:03:242016-04-22 05:55:12Poor Corporate Governance of Red Rock Resorts Draws Attention of Institutional Investors
The $460-million Fertitta Entertainment internalization fee is much higher compared to historical REIT internalization fee figures from a Sept. 2014 Duff & Phelps study. Some REITs have internalized external managers with no fee. The non-insider cost for acquiring Fertitta Entertainment should be closer to $50 million, not $460 million, based on termination provisions in the casino management agreements
More Questions about the $460-Million Valuation of Fertitta Entertainment
/in UpdatesA key feature of the Red Rock IPO is the use of proceeds, plus additional debt, to acquire Fertitta Entertainment for $460 million in a related-party transaction. Investors should ask the company how it arrived at and agreed to this price.
Questions about the Audited Financial Statements of Red Rock Resorts
/in UpdatesDid Fertitta Entertainment provide audited financial statements with an unqualified opinion by its auditor after it agreed to be acquired by Red Rock? If it did not provide audited financial statements, how did Red Rock’s auditor handle the inclusion of Fertitta Entertainment when it produced the audited consolidated financial statements of the Station Holdco holding company?
Why is Station Casinos Selling Valuable Casino Sites?
/in UpdatesInvestors should ask Red Rock Resorts/Station Casinos and its IPO underwriters: Why is the company selling valuable casino sites? Where will growth come from if the company is selling off future casino sites? Do the Fertittas and other executives of Red Rock have confidence in the company’s core Las Vegas locals business?
“Too-Big-To-Regulate”
/in UpdatesWe sent a letter to Nevada Governor Brian Sandoval regarding the Station Casinos/Red Rock Resorts IPO to provide the governor with “specific examples of problems related to the approval of the Station Casinos/Red Rock Resorts IPO by the Nevada Gaming Commission on January 21, 2016 in order to illustrate the challenges Nevada faces in regulating a ‘too-big-to-regulate’ significant owner of one of the major gaming companies in Las Vegas.”
Poor Corporate Governance of Red Rock Resorts Draws Attention of Institutional Investors
/in UpdatesThere has been an increased focus on the corporate governance structures that boards implement leading up to an IPO. We have criticized the corporate governance of Red Rock Resorts, Inc. since its IPO was announced last October (and when it was still called Station Casinos, Inc.).
The $460-Million Fertitta Entertainment “Internalization Fee”
/in UpdatesThe $460-million Fertitta Entertainment internalization fee is much higher compared to historical REIT internalization fee figures from a Sept. 2014 Duff & Phelps study. Some REITs have internalized external managers with no fee. The non-insider cost for acquiring Fertitta Entertainment should be closer to $50 million, not $460 million, based on termination provisions in the casino management agreements