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Withhold the Vote 2018: Failure to Sunset Perpetual Dual-Class Stock

We encourage Red Rock Resorts shareholders to withhold authority to vote on their proxy card for the company’s board of directors – Frank J. Fertitta III, Lorenzo J. Fertitta, Robert A. Cashell, Jr., Robert E. Lewis, and James E. Nave, D.V.M. – at the upcoming annual stockholders meeting on June 14.

The many problems arising from the company’s perpetual dual-class stock make it necessary for outside shareholders to withhold their votes, especially after the company has made no attempt to address the significant shareholder discontent expressed at last year’s annual meeting.

Perpetual dual-class shares trade at a significant discount, risk index exclusion, and are opposed by major shareholder advocacy groups.

Read our report, Withhold the Vote 2018: Failure to Sunset Perpetual Dual-Class Stock

Law Firms Announce Investigations into Red Rock Resorts

Six law firms have announced investigations into Red Rock Resorts following the company’s annual meeting in July, when shareholders showed their dissatisfaction with the company’s directors.

1. Harwood Feffer LP
“Our investigation concerns whether the Company board of directors has breached its fiduciary duties to shareholders, grossly mismanaged the Company, and/or committed abuses of control in connection with potential self-dealing and related party transactions.”
Read the press release: http://www.prnewswire.com/news-releases/harwood-feffer-llp-announces-investigation-of-red-rock-resorts-inc-300489300.html

2. Andrew & Springer LLC
“Andrews & Springer LLC, a boutique securities class action law firm focused on representing shareholders nationwide, is investigating potential securities violation claims and breach of fiduciary duty claims against Red Rock Resorts, Inc.”
Read the press release: http://www.businesswire.com/news/home/20170717005016/en/

3. Levi & Korsinsky, LLP
“Levi & Korsinsky announces it has commenced an investigation of Red Rock Resorts, Inc. (NASDAQ:RRR) concerning possible breaches of fiduciary duty.”
Read the press release: http://www.businesswire.com/news/home/20170717006253/en/

4. Glancy Prongay & Murray LLP
“The investigation concerns whether the Company board of directors has breached its fiduciary duties to shareholders, grossly mismanaged the Company, and/or committed abuses of control in connection with potential self-dealing and related party transactions, including allegedly overpaying for Red Rock real estate.”
Read 1st press release: http://www.businesswire.com/news/home/20170718006073/en/
Read 2nd press release: http://www.businesswire.com/news/home/20170822006124/en/

5. Lifshitz & Miller LLP
“Lifshitz & Miller announces investigation on behalf of RRR investors concerning whether RRR’s board breached its fiduciary duties and engaged in self-dealing transactions, including allegedly overpaying for RRR real estate.”
Read the press release: http://www.prnewswire.com/news-releases/lifshitz–miller-llp-announces-investigation-of-blue-apron-holdings-inc-irobot-corporation-monogram-residential-trust-inc-quadrant-4-system-corporation-red-rock-resorts-inc-west-marine-inc-and-zto-express-cayman-in-300492913.html

6. Kahn Swick & Foti, LLC
“KSF’s investigation is focusing on whether Red Rock Resorts’ officers and/or directors breached their fiduciary duties to the Company’s shareholders or otherwise violated state or federal laws.”
Read 1st press release: http://www.businesswire.com/news/home/20170728005837/en/
Read 2nd press release: http://www.businesswire.com/news/home/20170811005623/en/

Why It Is Necessary to Withhold Your Vote

In a new report we argue that it is necessary for Red Rock Resorts’ shareholders to withhold votes from the company’s three independent directors – James E. Nave, D.V.M., Robert E. Lewis, and Robert A. Cashell, Jr. – on their proxies for the company’s July 6, 2017 annual stockholders meeting.

Read our report encouraging shareholders to withhold votes on Red Rock’s independent directors.

We fully support ISS’ recommendation to withhold votes on all of Red Rock’s directors.

These long-serving directors have failed to advocate for the sunsetting of the company’s myriad of poor corporate governance features since its IPO last year, and they have not acted to prevent the enrichment of company insiders and related parties. We believe it is essential to send an unambiguous message to management that investors expect a higher standard of corporate governance at a publicly-traded company, especially now that outside shareholders own a majority of the economic interest in the company.

In taking the company public, Red Rock’s board of directors implemented several antitakeover measures, including a dual-class ownership structure with 10:1 super voting stock for insiders.

Red Rock’s three independent directors are the sole members of its Nominating and Corporate Governance Committee, which is responsible for monitoring the company’s governance matters. Furthermore, Red Rock’s independent directors have a history of approving transactions that are not in the best interest of the company or its outside shareholders.

For these reasons, we encourage Red Rock’s Class A shareholders to withhold their votes from the elections from Directors Nave, Lewis, and Cashell at the company’s upcoming annual meeting of stockholders.