Posts

Should You Pay Someone Else’s Income Taxes?

Under a tax distribution agreement, Station Casinos spent $43.6 million in 2016 to cover some of the federal income tax obligations of the Fertitta family and other owners of the company. Should Red Rock shareholders continue to let Station Casinos, of which they own 57%, spend cash on covering the income tax liabilities of pre-IPO owners like the Fertittas?

Read more

Deutsche Bank Would Have Valued Red Rock at $5.39 Per Share a Year Ago

According to a 2/17/15 Deutsche Bank analyst report, Station Casinos LLC, as of 12/31/2014, was estimated to have an enterprise value to be $2.59 billion with an implied an equity valuation of $624.6 million. Investors should ask Deutsche Bank how, in its opinion, the value of Station Casinos could have more than tripled in little over a year.

Read more

Red Rock Resorts is a Second-Class Gaming IPO

Investors who buy Red Rock’s second-class shares on offer will gain a minority (33%) stake in the once-bankrupt Las Vegas casino and tavern operator, Station Casinos. The terms of the offering beg questions about company insiders’ confidence in its long-term prospects. Prospective investors should ask management the following questions

Read more

Questions about the Audited Financial Statements of Red Rock Resorts

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?

Read more

Why is Station Casinos Selling Valuable Casino Sites?

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?

Read more

“Too-Big-To-Regulate”

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.”

Read more

The $460-Million Fertitta Entertainment “Internalization Fee”

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

Read more