Shares of Wynn Resorts (WYNN - Free Report) fell nearly 3% on Wednesday as the embattled casino and resort power continues to see its stock price fluctuate almost daily.
Former Wynn CEO Steve Wynn, who resigned recently amid sexual assault and harassment allegations, now “intends to sell all or a portion” of his stock in the company. Mr. Wynn is currently the company’s largest shareholder, holding roughly 11.8% of outstanding shares.
Mr. Wynn could potentially sell up to 12.1 million shares of Wynn stock, which would be valued at roughly $2.2 billion, based on Wednesday’s price. However, the company noted in Wednesday’s SEC filing that “no assurance” can be made on whether Mr. Wynn will elect to sell his stock or how he will choose to do it.
This news comes after two months of stories and legal battles surrounding Mr. Wynn’s sexual misconduct allegations. Mr. Wynn has denied these allegations, despite reaching a $7.5 million settlement with at least one accuser.
It seems that Wynn shareholders are unclear how to feel about this potential move, which could temporarily devalue their stock if over 12 million shares flood the market. On the other hand, if Mr. Wynn does indeed sell some or all of his stock, the company could be headed for a potential takeover, which some investors might welcome amid these uncertain times.
However, in spite of the allegations against the former CEO and the possibility that he might sell a large chunk of the company, Wynn is expected to perform rather well in 2018.
Wynn’s Q1 revenues are projected to surge over 14% to reach $1.68 billion, while the casino giant’s full-year sales are expected to climb by 10.2% to hit $6.95 billion. The company is also expected to see its earnings soar.
Wynn is projected to see its quarterly earnings skyrocket 54%, while its fiscal 2018 EPS figure is expected to jump by 43.2% to reach 7.82 per share. These bottom-line expansion projections might ease some worries while Wynn faces public scrutiny.
Analysts have also turned more positive recently regarding Wynn’s 2018 financial outlook. Wynn has earned multiple earnings estimate revisions for its current quarter, the following quarter, the current full year, and the following full year, with 100% agreement to the upside—all within the last 60 days.
Wynn stock might be one investors consider buying up, as Mr. Wynn’s alleged misconduct doesn’t look like it will hurt the company’s performance in the near term. Wynn is also currently a Zacks Rank #2 (Buy) and sports a “B” grade for Growth in our Style Scores system.
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