Why the casino tycoon's Oct. 9 Hong Kong IPO isn't a sure bet.
HONG KONG -- Full of vacant rooms, empty convention halls and sparsely played tables, Las Vegas is not weathering the recession as well as casino tycoons would like. So American billionaire Steve Wynn is betting that Chinese gamblers will fill his casino in Macau and, more importantly, that Chinese investors will help him raise some much-needed cash.
But the gamble he and Las Vegas Sands ( LVS - news - people ) chief Sheldon Adelson are making by going public with their Macau properties on the Hong Kong stock exchange is anything but a sure bet.
Oct. 9 marks the first day of trading for Wynn Macau, and what happens to the stock price will reveal just how confident traders are about the prospects of an economic recovery.
Wynn's IPO comes at a time when Hong Kong's investors appear to have grown weary of so many new listings in such a short time. Ten IPOs in the past three weeks have mostly evoked a tepid response from traders as five of them fell below their debut price and only one finished unchanged. The two biggest losses came from Glorious Properties, which fell 14.6% last Friday, and Metallurgical Corp of China, which lost 11.7% a week earlier.
On Thursday, however, investors appeared to have recovered some of their appetite for IPOs when Ausnutria Dairy Corp. jumped over 20% in early trading. China Vanadium, Titano-Magnetite Mining and Yingde Gases also made their debuts Thursday.
Despite concerns that Wynn's shares were overpriced at $1.29 apiece, the offer was oversubscribed. About $250 million of the $1.6 billion worth of shares on offer were snapped up by several Asian billionaires plus a fund management company. Wynn Macau holds a 25% stake in the Wynn's Macau business.
www.forbes.com/2009/10/08/...quities-ipo.html?partner=yahootix