Posted on: August 15, 2024, 03:32h.
Last updated on: August 15, 2024, 03:33h.
Shares of Caesars Entertainment (NASDAQ: CZR) surged after Carl Icahn’s Icahn Enterprises (NASDAQ: IEP) disclosed its 2.44 million share stake in the casino operator.
Icahn now possesses 2,440,109 shares of Caesars, as per a Form 13F filing with the SEC. Institutional investors must disclose equity stakes 45 days after a quarter, suggesting Icahn’s position could have changed.
With Caesars having 215.44 million shares outstanding, Icahn holds approximately 1.1% of the total shares, making him a significant investor though not in the top 10. The largest shareholders are Vanguard and BlackRock with a combined ownership of 18.67%.
Icahn’s Approach to Caesars
In May, Icahn expressed that he’s a passive investor in Caesars and not considering activist involvement, hoping for share price appreciation like other investors.
However, Icahn’s impactful history with Caesars cannot be overlooked, as he played a key role in the company’s transformation. His 2019 investment led to Eldorado Resorts’ $17.3 billion acquisition of Caesars, creating “new Caesars.” The management of Eldorado now oversees Caesars, with Icahn expressing admiration for their leadership.
Investors responded positively to Icahn’s renewed interest in Caesars, boosting the stock’s performance. Although the stock has seen recent rebounds, it has yet to reach second-quarter highs.
While Icahn may currently be at a loss with Caesars, potential catalysts such as profit growth in the digital division, debt reduction efforts, lower interest rates, and asset sales could drive stock returns.
Potential Catalysts for Caesars Stock
Despite potential losses, Caesars could see value appreciation with improving financials, debt management, and strategic asset divestitures.
CEO Tom Reeg has indicated a willingness to sell non-core assets to bolster cash flow, offering further upside potential for the company.