Two Way Hard Three | Las Vegas Casino & Design Blog

July 24, 2008 2:38 PM Posted by Jeff Simpson

SW at his best today, taking shots at his Macau and Las Vegas competitors, casino gaming journalists, Wynn stock short sellers and short-term investors.

Talked about looming air service cuts ("important," but not much operators can do about it), recent and peending visa restrictions in Macau (at the moment negative impact is "related to others, not us"), Encore budget increase since last quarter, up $100 million to $2.3 billion ("We added some more stuff"), his refusal to cut spending or staffing during an economic downturn ("If there's less traffic you make less money -- live with it"), Tim and Tom ("We have plans to grow in the future. The opportunity to get two men who are just barely into their prime was irresistable"), Encore hiring process (24k applicants in 3 days, 30% of them now unemployed), and competitors' problems ("We thrive in markets that are overdeveloped" -- Whether our competitors do well, their success is not entirely relevant to us) and the "junket war" in Macau, recently curbed by new government commission caps (Five of the six operators in Macau (all but Wynn Macau) chased each other in a circle chasing junkets).

Good stuff.

July 24, 2008 7:39 PM Posted by Brian Fey

I need to give the call a 2nd listen, as I always do. But two different things stuck out in my mind. He briefly mentioned, that the Encore's would also include a "Feature" famous to other Wynn past properties. So I don't think the Pool is the only Feature Encore has, unless the Pool is more than just a pool? But, he did state he had some surprises to draw people to these properties, his traditional Wynn signature.

The other part I thought was interesting was the question from Goldman Sachs, I believe it was. But he ask Steve about stories and reports, that Wynn might sell off some land, entities, or properties. I am unaware of any such story and I follow, Wynn as closely as anyone outside of the company. I am aware of the discussion of Wynn doing an IPO in the Asian market, but this is just simply a way to generate cash which could be used for various things. So I am a little unsure of what he is talking about. Wynn gave his standard answer, "we are always open to new ideas, and looking for various ways to increase the value of our company for our shareholders, but we have no plans at this time to do so. "

I also thought it was classy, that Wynn took a call, from what many would consider a small individual shareholder. This is the first time, I can recall a individual investor having his question aired on the call. Perhaps Its just the first time one has called in, or maybe its just the first time, the operator let the call go through. I dont' know, but Steve was amazingly kind, and delightful to the caller.

Its no secret, I have been a long supporter of Steve Wynn, Wynn Resorts, and anything related to their company. In Wynn's eyes, I have a tiny amount of stock, but to my its a substantial amount of my net worth, and in a year, where I've seen my Wynn investment drop by six figures, I have to say, I left this call feeling as confident as ever in this company. Like many on this board, I just love to hear Steve Wynn talk, his energy, and passion for his company, are so evident anytime he speaks. I realize Las Vegas, might not have seen the worse yet, or maybe it has. But business will come back, and I think Wynn is the leader in every market in which he operates, and I don't see that changing for the foreseeable future.

July 24, 2008 8:09 PM Posted by Hunter

I believe one of the things Wynn and Co. were railing against with regard to bloggers and press was the Asian IPO story. I believe that was total BS.

We discussed both this call and the quote about bloggers from the paper the other day in the Vegas Gang from today. Today's show was great (and only 50% bullshit, thank goodness). I hope to have it posted tomorrow.

July 24, 2008 10:32 PM Posted by mike_ch

He has reason to celebrate. He has avoided a lot of bad news by using Macao as a raft.

Hey, I've been a critic as much as anybody else has, but I think Wynn is a safe bet since he's well diversified.

I foresee the carpet being pulled out from under Las Vegas, possibly not being able to recover for a very long time. However, casino resorts themselves are a pretty good industry, you just have to pick one that isn't as heavily invested in one city that's so set up for failure in the upcoming new economy as Vegas is.

That's why the You Know Whos who took Steve's other hotels confuse me. They've practically staked their company's whole future here.

July 25, 2008 5:58 AM Posted by detroit1051

I get tired of Steve's drama in the calls. I'd rather read the transcript without the theatrics.
http://seekingalpha.com/article/86936-wynn-resorts-ltd-q2-2008-earnings-call-transcript?source=yahoo&page=-1

July 25, 2008 7:39 AM Posted by Brian Fey

I guess reading the call, help in some respects, but its so full of mistakes, I think I'll stick to the calls. Let me quote some examples....

"I don�t know. We have done enough damage to the Schwartzs."

You would think the person listening to this would, be familiar with the industury terms like "shorts"

"If Lin kicks me. Nothing keeps me up at night."

If the person listenting to this call knew anything about the company, they would have heard Elaine, not Lin. That's the person Steve shares a bed with at night. :)

And now for my personal favorite....

"Steve, I was wondering if you could talk a little bit about the physical structure of your assets, and maybe how you are positioning on core in Macau and on core in Vegas"

This one needs no explination. :)

ENCORE... Maybe he is changing the name to On Core?

July 25, 2008 7:56 AM Posted by detroit1051

Brian, you're right. Since I know something about Steve Wynn and the company, I glossed over the errors. Someone not familiar with Wynn could walk away misinformed.
Is there a computer program that does the transcript without human input?
Is it too late to change the name to On Core? :-)

July 25, 2008 9:43 AM Posted by David McKee

The ongoing vagueness about Tim & Tom's role at Wynn makes me wonder if they have a portfolio or if Steve just wanted some unconventional thinkers added to his executive mix, in hopes of further evolving his business model or his marketing, bringing in new customers, etc.? Could they be there mainly to bounce lots of idiosyncratic ideas off the walls and see which ones stick?

Pure speculation, of course.

July 25, 2008 9:43 AM Posted by mike_ch

It's all voice recognition goofs.

Wait until Google releases the voice recognition program they've been developing and testing with 1800GOOG411. Things will be scary accurate then.

July 25, 2008 11:04 AM Posted by Brian Fey

I don't feel as if Wynn is being vague on the T&T show at all. They are very talanted, and he is a fast growing company. They apperantly wanted a job, and so Steve offered one. Having a few great people on staff with no exact home, is no big deal for a company with 20k employees. I'm sure Wynn can carry two extra people for a while, until he finds a use for them. They have 2 hotels under construction, and 3 more the design phase. So there is no question, that Wynn will need many new upper management members in the next few years. So he is just secuing those members now.