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Thank you eastunder for your help. I do see potential here as the tide turns and there is less of a focus on unemployment and the media shifts to discounted vacation packages as a way to say “ahhhh” and breathe easy now that it is over.
There is a large push from the current administration to put the recession behind us.
http://www.marketwatch.com/story/bernanke-declares-the-recession-over-2009-09-15
WASHINGTON (MarketWatch) -- Federal Reserve Chairman Ben Bernanke said Tuesday that the recession has ended, at least based on the numbers.
"From a technical perspective, the recession is very likely over at this point," Bernanke told a conference at the Brookings Institution. But "it's still going to feel like a very weak economy for some time."
Bernanke added there is a risk that labor markets will remain weak through 2010 because growth will be too anemic to create jobs. Many economists now expect the labor market to recover slowly, he noted.
Unless the economy can manage growth stronger than its long-term trend rate, "unemployment will be slow -- slow to come down," he said. "It will come down, but it may take some time."
After acknowledging that economic forecasting "is not one of your most precise sciences," Bernanke said most forecasters think economic growth in 2010 will be moderate because of "ongoing headwinds," including financial and credit problems, sectoral adjustments in the economy, the desire of families to pay off debt and the need for the federal government to restrain spending.
Vince Reinhart, a former top Fed staffer who is now at the American Enterprise Institute, said the technical end of the recession is more about arithmetic than anything else.
"June was mostly likely the trough. Growth will be positive in the third quarter," he commented. "All that tells you is that market economies do not stay in free fall. That doesn't tell you that we have a durable expansion in motion, it doesn't tell you growth is assured in 2010 and it doesn't tell you that the unemployment rate goes down."
Bernanke also expressed confidence that Congress would complete work on new rules for Wall Street.
Many analysts have raised doubts that Congress could grapple with reforming the health-care system and the financial framework this year. But Bernanke didn't share this doubt.
"I am quite confident comprehensive reform will be coming," the Fed chief said.
One of the reforms that's needed is to provide some way to unwind big financial institutions "in a way that would impose market discipline, impose losses on creditors, but would avoid the disorderly chaotic type of collapse that we saw with Lehman a year ago."
The bulk of Bernanke's remarks was devoted to a defense of the response from the Fed and its global partners to the financial crisis. Read his prepared remarks.
Bernanke said global regulators acted swiftly in the wake of last September's financial crisis and succeeded in bringing the global economy back from the brink of collapse. There is no longer widespread fear of a financial collapse and economic activity is leveling out, he added.
Bernanke's remarks were similar to a speech he gave in August at the Fed's annual retreat in Jackson Hole, Wyo.
Since the August speech, Bernanke was reappointed by President Barack Obama to a second four-year term at the helm of the central bank.
Greg Robb is a senior reporter for MarketWatch in Washington.
Yes it will take awhile to see the effects and everyone is still gun shy waiting for the sky to fall.
That being said there will be investments before there will be large spending on second and again third cars and toys. I believe with the current world conditions of hostility towards American tourists there will be a lean towards domestic vacations. Disney Land and Vegas will see a raise in 2010 in my opinion. A slow and steady rise.
Good for day traders
Good for the longs.
I see this board is just really getting started, I am interested to see where it goes. If there is a pop they will come!
We'll see, I have a little faith in this. Casinos are my game!
Are you a card player boatman?
I am playing the river on this one.
Typical paint for a morning start with EXTO, lets see if we can finish this week at one penny or higher!
Thank you very much for the update.
Things have been rough for casinos over the last couple with this economy; however with the turn will come much better market evaluation. I look forward to seeing profits to the end of this quarter and into the first of 2010. I have already booked my trip, have you?
Anyone here a card player?
Good morning all, do we have a share structure here?
Good morning everyone. Please feel free to suggest anything for the IBOX. Lets see some wonderful dicussion.
I do believe that once things get moving on this stock we'll see some motion.
I am going to fill here soon, things are traded very tight here and so long as people hold positions I think we will break twenty five cents.
All things seem to be lining up for this little stock in Fort Wayne Indiana.
Thank you very much for making me fell welcome. Gaming is my main concern when it comes to inestments. Last year was hard on all entertainment and casinosm follows by another tough one this year. Idications on the economy are good so I am looking forward to a strong quarter in 2010. I am have not completed DD on this one but will keep you up to date with what I find.
Hello all, how do I try this Free Trial Member to see if this is for me, and does that include level 2 and real time infomation?
agreed, I am going to fill.
CORPORATE GOVERNANCE
Board Members
Stephen A. Wynn
Chairman of the Board and Chief Executive Officer
Kazuo Okada
Vice Chairman of the Board
Russell Goldsmith
Director
Linda Chen
Director
Dr. Ray R. Irani
Director
Robert J. Miller
Director
John A. Moran
Director
Alvin V. Shoemaker
Director
D. Boone Wayson
Director
Elaine P. Wynn
Director
Allan Zeman
Director
Wynn Resorts, Limited Reports Third Quarter Results
LAS VEGAS--(BUSINESS WIRE)--Oct. 27, 2009-- Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the quarter ended September 30, 2009.
Net revenues for the third quarter of 2009 were $773.1 million, compared to $769.2 million in the third quarter of 2008.
Consolidated adjusted property EBITDA (1) increased 12.4% to $198.2 million for the third quarter of 2009, compared to $176.4 million in the third quarter of 2008.
On a US GAAP (Generally Accepted Accounting Principles) basis, net income for the quarter was $34.2 million, or $0.28 per diluted share, compared to net income of $51.2 million, or $0.49 per diluted share in 2008. Adjusted net income in the third quarter of 2009 was $39.9 million, or $0.33 per diluted share (adjusted EPS)(2) compared to an adjusted net income of $64.3 million, or $0.62 per diluted share in the third quarter of 2008.
Las Vegas Third Quarter Results
Our results of operations for the periods presented are not comparable to prior periods as the three months ended September 30, 2009 includes Encore at Wynn Las Vegas, which opened on December 22, 2008. The prior year quarter includes only Wynn Las Vegas.
For the quarter ended September 30, 2009, our Las Vegas operations generated adjusted property EBITDA of $70.0 million (with a 21.6% EBITDA margin on net revenue), flat when compared to the $70.1 million generated in the third quarter of 2008. Revenues at Wynn Las Vegas were up 10.2% but EBITDA was flat due to the additional costs associated with the operation of Encore.
Net casino revenues in the third quarter of 2009 were $144.0 million, flat with the third quarter of 2008. Table games drop was $518.1 million, with win per table per day (before discounts) of $5,801, compared to drop of $531.0 million and win per table per day of $10,062 in the third quarter of 2008. Table games win percentage of 23.7% was within the property’s expected range of 21% to 24%. Slot machine handle of $850.3 million was in-line with the comparable period of 2008 and win per unit per day was $149, compared to a win per unit per day of $225 in the third quarter of 2008. The reduction in win per table and win per unit is due to the addition of 91 tables and 812 slot machines primarily at Encore.
Gross non-casino revenues for the quarter were $225.0 million, a 17.9% increase from the third quarter of 2008, driven primarily by higher hotel and food and beverage revenues resulting from Encore. Hotel revenues were up 17.7% to $76.9 million during the quarter, versus $65.3 million in the third quarter of 2008 due to the addition of 2,034 suites at Encore. Our Las Vegas operations achieved an Average Daily Rate (ADR) of $210 for the quarter, compared to $272 in the 2008 quarter. Our occupancy was 83.9%, compared to 96.1% during the prior year period, generating revenue per available room (REVPAR) of $176 in the 2009 period (32.6% below the third quarter of 2008 of $261).
Food and beverage revenues increased 29.8% to $96.8 million in the quarter as a result of the additional 12 food and beverage outlets located in Encore. Retail revenues were $21.0 million in the quarter, 8.6% below last year’s levels and entertainment revenues increased 3.9% to $16.6 million from the third quarter of 2008 primarily due to the contribution from headliner performances during the quarter.
Macau Third Quarter Results
In the third quarter of 2009, net revenues were $448.5 million compared to $474.8 million in the third quarter of 2008. Wynn Macau generated adjusted property EBITDA of $128.2 million, compared to $106.3 million in the third quarter of 2008.
Table games turnover in the VIP segment was $14.1 billion for the period, compared to $13.3 billion for the third quarter of 2008. VIP table games win as a percentage of turnover (calculated before discounts and commissions) for the third quarter of 2009 was 2.8%, within the expected range of 2.7% to 3.0% and below the 3.1% experienced in the 2008 quarter.
Table games drop in the mass market category was approximately $501.8 million during the period, an 11.8% decrease from $568.8 million in the third quarter of 2008. Mass market table games win percentage (calculated before discounts) of 20.8% was within our expected range of 19% to 21% and slightly higher than the 20.3% experienced in the third quarter of 2008.
Slot machine win decreased 8.9% compared to the third quarter of 2008 and win per unit per day decreased 0.3% to $365 compared to $366 in the third quarter 2008 as we reconfigured the slot floor and removed approximately 100 machines.
Wynn Macau achieved an Average Daily Rate (ADR) of $263 for the third quarter of 2009, compared to $272 in the 2008 quarter. The property’s occupancy was 89.2%, compared to 86.2% during the prior year period, generating revenue per available room (REVPAR) of $235 in the 2009 period, slightly above 2008 levels of $234.
On September 30, 2009, we added a new high-limit gaming salon containing approximately 40 machines. In November 2009 we will also add two new private gaming salons with 29 VIP tables.
Encore at Wynn Macau
We continue construction on our further expansion of Wynn Macau that will add a fully-integrated resort hotel named Encore at Wynn Macau, with approximately 400 luxury suites and four villas, as well as additional gaming areas that will include 37 VIP table games, approximately 20 high-limit slot machines, 24 premium mass market table games and 75 premium mass market slot machines, food and beverage and retail amenities. We expect Encore at Wynn Macau to open in the first half of 2010.
The current budget for Encore at Wynn Macau is approximately $650 million. As of September 30, 2009, we have incurred $375.6 million associated with the construction of Encore at Wynn Macau.
Other Factors Affecting Earnings
Interest expense, net of $2.6 million in capitalized interest, was $50.1 million for the third quarter of 2009. Depreciation and amortization expenses were $101.9 million. Corporate expense and other was $15.8 million in the third quarter, including $6.9 million in stock based compensation.
Balance Sheet and Capital Expenditures
Our total cash balances on September 30, 2009 were $1.3 billion. Total debt outstanding at the end of the quarter was $4.2 billion, including approximately $2.7 billion of Wynn Las Vegas debt and $1.5 billion of Wynn Macau debt. Capital expenditures during the third quarter of 2009 of approximately $124 million was primarily related to the ongoing construction of Encore at Wynn Macau.
In October 2009, Wynn Macau Limited, a newly formed and indirect wholly owned subsidiary of Wynn Resorts and the developer, owner, and operator of Wynn Macau, completed an initial public offering of 27.7% of its ordinary shares on The Stock Exchange of Hong Kong Limited. Net proceeds to the Company as a result of this transaction were approximately $1.8 billion.
In October 2009, we purchased Wynn Las Vegas bank loans with a face value of $87.6 million for $84.4 million.
In October 2009, Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp. issued $500 million aggregate principal amount of 7 7/8% First Mortgage Notes due November 1, 2017 at a price of 97.823% of the principal amount. The net proceeds of approximately $480 million were used to repay amounts outstanding under the Wynn Las Vegas revolving credit facilities and term loan facility. Subsequent to this transaction and the loan repurchase discussed above, the outstanding balance under the Wynn Las Vegas Term Loan Facility is $80.4 million and the outstanding balance under the Wynn Las Vegas Revolving Facility is $317.9 million, with remaining availability of $120.0 million.
Total cash balances, after the Wynn Macau, Limited IPO and the debt transactions mentioned above, was $3.1 billion and total debt outstanding was $4.1 billion, including approximately $2.6 billion of Wynn Las Vegas debt and $1.5 billion of Wynn Macau debt.
Conference Call Information
The Company will hold a conference call to discuss its results on Tuesday, October 27, 2009 at 8:30 a.m. PT (11:30 a.m. ET). Interested parties are invited to join the call by accessing a live audio webcast at http://www.wynnresorts.com (Investor Relations).
Forward-looking Statements
This release contains forward-looking statements regarding operating trends and future results of operations. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by us. The risks and uncertainties include, but are not limited to, competition in the casino/hotel and resorts industries, the Company’s dependence on existing management, levels of travel, leisure and casino spending, general economic conditions, and changes in gaming laws or regulations. Additional information concerning potential factors that could affect the Company's financial results is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2008 and the Company's other periodic reports filed with the Securities and Exchange Commission. The Company is under no obligation to (and expressly disclaims any such obligation to) update its forward-looking statements as a result of new information, future events or otherwise.
Non-GAAP financial measures
(1) “Adjusted property EBITDA” is earnings before interest, taxes, depreciation, amortization, pre-opening costs, property charges and other, corporate expenses, stock-based compensation, and other non-operating income and expenses, and includes equity in income (loss) from unconsolidated affiliates. Adjusted property EBITDA is presented exclusively as a supplemental disclosure because management believes that it is widely used to measure the performance, and as a basis for valuation, of gaming companies. Management uses adjusted property EBITDA as a measure of the operating performance of its segments and to compare the operating performance of its properties with those of its competitors. The Company also presents adjusted property EBITDA because it is used by some investors as a way to measure a company’s ability to incur and service debt, make capital expenditures and meet working capital requirements. Gaming companies have historically reported EBITDA as a supplement to financial measures in accordance with U.S. generally accepted accounting principles (“GAAP”). In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including Wynn Resorts, Limited, have historically excluded from their EBITDA calculations pre-opening expenses, property charges and corporate expenses, that do not relate to the management of specific casino properties. However, adjusted property EBITDA should not be considered as an alternative to operating income as an indicator of the Company’s performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure determined in accordance with GAAP. Unlike net income, adjusted property EBITDA does not include depreciation or interest expense and therefore does not reflect current or future capital expenditures or the cost of capital. The Company compensates for these limitations by using adjusted property EBITDA as only one of several comparative tools, together with GAAP measurements, to assist in the evaluation of operating performance. Such GAAP measurements include operating income (loss), net income, cash flows from operations and cash flow data. The Company has significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, taxes and other non-recurring charges, which are not reflected in adjusted property EBITDA. Also, Wynn Resorts’ calculation of adjusted property EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited.
The Company has included schedules in the tables that accompany this release that reconcile (i) net income to adjusted net income, and (ii) operating income (loss) to adjusted property EBITDA and adjusted property EBITDA to net income.
(2) Adjusted net income is net income before pre-opening costs, property charges and other non-cash non-operating income and expenses. Adjusted net income and adjusted net income per share (“EPS”) are presented as supplemental disclosures because management believes that these financial measures are widely used to measure the performance, and as a principal basis for valuation, of gaming companies. These measures are used by management and/or evaluated by some investors, in addition to income and EPS computed in accordance with GAAP, as an additional basis for assessing period-to-period results of our business. Adjusted net income and adjusted net income per share may be different from the calculation methods used by other companies and, therefore, comparability may be limited.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Operating revenues:
Casino $ 565,072 $ 590,576 $ 1,615,071 $ 1,805,984
Rooms 91,181 79,603 284,772 251,676
Food and beverage 109,152 87,607 330,293 275,627
Entertainment, retail and other 71,500 69,306 204,104 210,418
Gross revenues 836,905 827,092 2,434,240 2,543,705
Less: promotional allowances (63,834 ) (57,906 ) (197,958 ) (170,656 )
Net revenues 773,071 769,186 2,236,282 2,373,049
Operating costs and expenses:
Casino 358,605 377,322 1,062,408 1,165,647
Rooms 30,238 19,317 80,293 60,060
Food and beverage 64,048 52,607 188,207 159,403
Entertainment, retail and other 43,623 39,436 119,657 127,310
General and administrative 88,946 85,371 265,544 249,606
Provision for doubtful accounts 5,150 36,296 12,979 49,012
Pre-opening costs 330 13,911 370 26,055
Depreciation and amortization 101,907 65,635 306,106 192,328
Property charges and other 725 1,623 11,272 31,188
Total operating costs and expenses 693,572 691,518 2,046,836 2,060,609
Operating income 79,499 77,668 189,446 312,440
Other income (expense):
Interest income 407 2,731 1,245 20,115
Interest expense, net of capitalized interest (50,140 ) (40,263 ) (160,861 ) (126,513 )
Increase (decrease) in swap fair value (5,344 ) (3,588 ) (988 ) 5,119
Gain on extinguishment of debt - - 22,513 -
Equity in income (loss) from unconsolidated affiliates
(38 ) 430 (76 ) 1,401
Other (3 ) (2,805 ) 208 (2,694 )
Other income (expense), net (55,118 ) (43,495 ) (137,959 ) (102,572 )
Income before income taxes 24,381 34,173 51,487 209,868
Benefit (provision) for income taxes 9,829 17,026 (25,612 ) 160,178
Net income $ 34,210 $ 51,199 $ 25,875 $ 370,046
Basic and diluted income per common share:
Net income:
Basic $ 0.28 $ 0.50 $ 0.22 $ 3.40
Diluted $ 0.28 $ 0.49 $ 0.22 $ 3.36
Weighted average common shares outstanding:
Basic 122,200 103,266 119,011
108,915
Diluted 122,610 104,270 119,263 110,106
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF NET INCOME
TO ADJUSTED NET INCOME
(amounts in thousands)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Net income $ 34,210 $ 51,199 $ 25,875 $ 370,046
Pre-opening costs 330 13,911 370 26,055
Gain on extinguishment of debt - - (22,513 ) -
(Increase) decrease in swap fair value 5,344 3,588 988 (5,119 )
Property charges and other 725 1,623 11,272 31,188
Adjustment for taxes on above (677 ) (6,007 ) 5,373 (14,573 )
Recognition of foreign tax credit - - - (140,655 )
Adjusted net income (2) $ 39,932 $ 64,314 $ 21,365 $ 266,942
Adjusted net income per diluted share $ 0.33 $ 0.62 $ 0.18 $ 2.42
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED PROPERTY EBITDA
AND ADJUSTED PROPERTY EBITDA TO NET INCOME
(amounts in thousands)
(unaudited)
Three Months Ended September 30, 2009
Wynn Las
Vegas
Wynn
Macau
Corporate and
Other
Total
Operating income (loss) $ (20,886 ) $ 83,228 $ 17,157 $ 79,499
Pre-opening costs - 330 - 330
Depreciation and amortization 77,811 23,351 745 101,907
Property charges and other 159 562 4 725
Management and royalty fees 4,814 17,797 (22,611 ) -
Corporate and other expenses 5,586 1,603 1,701 8,890
Stock-based compensation 2,508 1,303 3,092 6,903
Equity in income/(loss) from unconsolidated affiliates
50
- (88 ) (38 )
Adjusted Property EBITDA (1) $ 70,042 $ 128,174 $ - $ 198,216
Three Months Ended September 30, 2008
Wynn Las
Vegas
Wynn
Macau
Corporate and
Other
Total
Operating income (loss) $ (332 ) $ 59,552 $ 18,448 $ 77,668
Pre-opening costs 13,911 - - 13,911
Depreciation and amortization 42,269 22,610 756 65,635
Property charges and other 632 991 - 1,623
Management and royalty fees 4,425 18,441 (22,866 ) -
Corporate and other expenses 6,481 3,610 1,576 11,667
Stock-based compensation 2,636 1,084 1,716 5,436
Equity in income from unconsolidated affiliates
60 - 370 430
Adjusted Property EBITDA (1) $ 70,082 $ 106,288 $ - $ 176,370
Three Months Ended
September 30,
2009 2008
Adjusted Property EBITDA (1) $ 198,216 $ 176,370
Pre-opening costs (330 ) (13,911 )
Depreciation and amortization (101,907 ) (65,635 )
Property charges and other (725 ) (1,623 )
Corporate and other expenses (8,890 ) (11,667 )
Stock-based compensation (6,903 ) (5,436 )
Interest income 407 2,731
Interest expense, net of capitalized interest (50,140 ) (40,263 )
Decrease in swap fair value (5,344 ) (3,588 )
Other (3 ) (2,805 )
Benefit for income taxes 9,829 17,026
Net income $ 34,210 $ 51,199
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED PROPERTY EBITDA
AND ADJUSTED PROPERTY EBITDA TO NET INCOME
(amounts in thousands)
(unaudited)
Nine Months Ended September 30, 2009
Wynn Las
Vegas
Wynn
Macau
Corporate and
Other
Total
Operating income (loss)
$ (87,616 ) $ 225,614 $ 51,448 $ 189,446
Pre-opening costs - 370 - 370
Depreciation and amortization 233,680 70,184 2,242 306,106
Property charges and other 7,453 2,310 1,509 11,272
Management and royalty fees 13,871 51,258 (65,129 ) -
Corporate and other expenses 15,318 6,492 1,764 23,574
Stock-based compensation 7,072 3,762 7,863 18,697
Equity in income/(loss) from unconsolidated affiliates
(379 ) - 303 (76 )
Adjusted Property EBITDA (1) $ 189,399 $ 359,990 $ - $ 549,389
Nine Months Ended September 30, 2008
Wynn Las
Vegas
Wynn
Macau
Corporate and
Other
Total
Operating income $ 11,138 $ 242,823 $ 58,479 $ 312,440
Pre-opening costs 26,054 1 - 26,055
Depreciation and amortization 122,543 67,561 2,224 192,328
Property charges and other 21,711 9,371 106 31,188
Management and royalty fees 13,170 58,280 (71,450 ) -
Corporate and other expense 18,388 10,293 5,102 33,783
Stock-based compensation 7,014 2,541 4,435 13,990
Equity in income from unconsolidated affiliates
297 - 1,104 1,401
Adjusted Property EBITDA (1) $ 220,315 $ 390,870 $ - $ 611,185
Nine Months Ended
September 30,
2009 2008
Adjusted Property EBITDA (1) $ 549,389 $ 611,185
Pre-opening costs (370 ) (26,055 )
Depreciation and amortization (306,106 ) (192,328 )
Property charges and other (11,272 ) (31,188 )
Corporate and other expenses (23,574 ) (33,783 )
Stock-based compensation (18,697 ) (13,990 )
Interest income 1,245 20,115
Interest expense, net of capitalized interest (160,861 ) (126,513 )
(Decrease) increase in swap fair value (988 ) 5,119
Gain on extinguishment of debt 22,513 -
Other 208 (2,694 )
Benefit (provision) for income taxes (25,612
)
160,178
Net income $ 25,875 $ 370,046
WYNN RESORTS, LIMITED AND SUBSIDIARIES
SUPPLEMENTAL DATA SCHEDULE
Three Months Ended Nine Months Ended
September
30, 2009
September
30, 2008
September
30, 2009
September
30, 2008
Room Statistics for Las Vegas operations5:
Occupancy % 83.9 % 96.1 % 86.6 % 96.1 %
Average Daily Rate (ADR)1 $ 210 $ 272 $ 217 $ 291
Revenue per available room (REVPAR)2 $ 176 $ 261 $ 188 $ 280
Other information for Las Vegas operations5:
Table games win per unit per day3 $ 5,801 $ 10,062 $ 5,071 $ 8,809
Table Win % 23.7 % 24.3 % 20.7 % 21.6 %
Slot machine win per unit per day4 $ 149 $ 225 $ 161 $ 228
Average number of table games 230 139 229 139
Average number of slot machines 2,768 1,956 2,776 1,950
Room Statistics for Macau:
Occupancy % 89.2 % 86.2 % 86.4 % 87.5 %
Average Daily Rate (ADR)1 $ 263 $ 272 $ 265 $ 275
Revenue per available room (REVPAR)2 $ 235 $ 234 $ 229 $ 241
Other information for Macau:
Table games win per unit per day3 $ 15,077 $ 15,136 $ 14,308 $ 16,205
Slot machine win per unit per day4 $ 365 $ 366 $ 397 $ 345
Average number of table games 363 379 367 381
Average number of slot machines 1,124 1,230 1,196 1,243
(1) ADR is Average Daily Rate and is calculated by dividing total room revenue (less service charges, if any) by total rooms occupied.
(2) REVPAR is Revenue per Available Room and is calculated by dividing total room revenue less service charges, if any, by total rooms available.
(3) Table games win per unit per day is shown before discounts and commissions.
(4) Slot machine win per unit per day is net of participation fees and progressive accruals.
(5) Wynn Las Vegas, including Encore for 2009.
Source: Wynn Resorts, Limited
Wynn Resorts, Limited
Samanta Stewart, 702-770-7555
investorrelations@wynnresorts.com
Is there a reason this is not on this board?
Wynn Resorts Declares Special Cash Dividend and Announces Board Approval of a Regular Cash Dividend Commencing in 2010
LAS VEGAS--(BUSINESS WIRE)--Nov. 9, 2009-- Wynn Resorts, Limited (Nasdaq:WYNN), announced today that its Board of Directors declared a special cash dividend of $4.00 per share on its outstanding common stock. This dividend will be payable on December 3, 2009, to stockholders of record on November 19, 2009. The stock will begin to trade ex-dividend on November 17, 2009.
The Company’s Board of Directors also approved the commencement of a regular cash dividend program, beginning in 2010. It is currently anticipated this regular cash dividend will be $0.20 per share of common stock for the first quarter of 2010, payable in the second quarter of 2010.
Forward-looking Statements
This release contains forward-looking statements regarding payment of certain cash dividends by the Company. Such forward-looking information involves important risks and uncertainties that could significantly affect payment by the Company of the cash dividends. The risks and uncertainties include, but are not limited to competition in the casino/hotel and resorts industries, the Company’s dependence on existing management, levels of travel, leisure and casino spending, general economic conditions, and changes in gaming laws or regulations. Additional information concerning potential factors that could affect payment by the Company of the cash dividends is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2008 and the Company's other periodic reports filed with the Securities and Exchange Commission. The Company is under no obligation to (and expressly disclaims any such obligation to) update its forward-looking statements as a result of new information, future events or otherwise.
Source: Wynn Resorts, Limited
Wynn Resorts
Samanta Stewart, 702-770-7555
With the economy as bad as it was last year and this year we can expect an upward shift. I get the call weekly to come out and spend some time with a comp. Things will turn this company will rise to the top again.
Do we have a share structure?
What a terrific stock. I am glad I stumbled on to it here.
Wynn Las Vegas Chocolatier Lionel Clement Places Second in World Chocolate Masters Competition
LAS VEGAS, Nov. 2 /PRNewswire-FirstCall/ -- Lionel Clement, the chocolatier at Wynn Las Vegas, has placed second in the World Chocolate Masters Competition, held in Paris from October 14-16. Clement was the U.S. representative in this premium international culinary competition, finishing ahead of 17 other chocolate masters. His winning interpretation of the theme, "Haute Couture," took the form of an avant-garde pair of scissors adorned with the silhouette of a woman's face and an elaborate hat formed from different layers of chocolate with a large spool of chocolate thread positioned at the base of the structure.
To be selected for this prestigious competition, Clement defeated four other pastry chefs and chocolatiers from some of the leading hotels and restaurants in the country at the U.S. finals held in New York City in 2008. The French-born chef has been producing chocolate for Wynn Las Vegas for the past three years and oversees the resort's chocolate room.
The World Chocolate Masters Competition was created in 2004 as the world's finest international culinary competition devoted solely to the creative use of chocolate in all its applications. This year's three-day competition was held in the "Salon du Chocolat Professionnel" exhibition at the Porte de Versailles in Paris. An international jury of 22 of the world's leading chocolate professionals judged contestants based on their work and creativity through the use of chocolate.
About Wynn Resorts
Wynn Resorts, Limited is traded on the Nasdaq Global Select Market under the ticker symbol WYNN and is part of the S&P 500 and NASDAQ-100 Indexes. Wynn Resorts owns and operates Wynn Las Vegas (www.wynnlasvegas.com), Encore (www.encorelasvegas.com) and Wynn Macau (www.wynnmacau.com). Wynn Las Vegas, a luxury hotel and destination casino resort located on the Las Vegas Strip features 2,716 luxurious guest rooms and suites, an approximately 111,000 square foot casino, 22 food and beverage outlets, an on-site 18-hole golf course, approximately 223,000 square feet of meeting space, an on-site Ferrari and Maserati dealership, and approximately 74,000 square feet of retail space.
Encore, the new signature resort in the Wynn collection, opened December 22, 2008. Encore is located immediately adjacent to Wynn Las Vegas and features 2,034 suites, approximately 72,000 square foot casino, 12 food and beverage outlets, a night club, a spa and salon, approximately 60,000 square feet of meeting space and approximately 27,000 square feet of upscale retail outlets.
Wynn Macau is a destination casino resort in the Macau Special Administrative Region of the People's Republic of China and currently features 600 deluxe hotel rooms and suites, approximately 205,000 square foot casino, casual and fine dining in five restaurants, approximately 46,000 square feet of retail space, a health club, pool and spa, along with lounges and meeting facilities.
SOURCE Wynn Resorts
Amy Rossetti, Senior Public Relations Manager, +1-702-770-3726, amy.rossetti@wynnlasvegas.com
I would be pleased to accept your ASSistance including your excellent trading techniques that have proved successful too many. I thank you very much for your ASSistance.
Hello all, I have been investing for a few years, but have not posted before.
I wanted to say hello to everyone and see if there are any tips that the veterans have as I get my feet wet.
Maybe tomorrow we'll break a penny again.
30 minutes left, lets see if we can get back to a penny. Anyone think we can?
Chart looks good here.
Someone is painting it down again. It is amazing how you can watch the effort day after day, week after week, month after month to paint this stick down. Tick Tock...
We are open for business, let’s see if we can either drop this to a level where the market makers can cover or let’s see a run where we can hurt them badly enough that they think twice about positioning this stock a second time.
How foolish of me. I am sure that everyone here is an expert trader and knows what a market maker is, but I am going to put up a little information for those who do not.
A market maker is a company, or an individual, that quotes both a buy and a sell price in a financial instrument or commodity held in inventory, hoping to make a profit on the bid/offer spread, or turn.
In foreign exchange (or FX) trading, where most deals are conducted over-the-counter and are, therefore, completely virtual, the market maker sells to and buys from its clients. Hence, the client's loss and the spread is the market-maker firm's profit, which gets thus compensated for the effort of providing liquidity in a competitive market. This extra liquidity reduces transaction costs and therefore facilitates trades for the clients, who would otherwise have to accept a worse price or even not be able to trade at all. Most foreign exchange trading firms are market makers and so are many banks, although not in all currency markets.
Recent developments in the over-the-counter FX market have permitted even buy-side (non bank participants) in becoming virtual market-makers through the advent of high speed/frequency software applications. These algorithmic engines submit bids and offers outside of prices that are available on other networks or ECN (electronic communication networks) where FX is traded.
Most stock exchanges operate on a matched bargain or order driven basis. In such a system there are no designated or official market makers, but market makers nevertheless exist. When a buyer's bid meets a seller's offer or vice versa, the stock exchange's matching system will decide that a deal has been executed.
In the United States, the New York Stock Exchange (NYSE) and American Stock Exchange (AMEX), among others, have a single exchange member, formerly known as specialists, and now as Designated Market Makers, who acts as the official market maker for a given security. In return for a) providing a required amount of liquidity to the security's market, b) taking the other side of trades when there are short-term buy-and-sell-side imbalances in customer orders, and c) attempting to prevent excess volatility, the specialist is granted various informational and trade execution advantages.
Other U.S. exchanges, most prominently the NASDAQ Stock Exchange, employ several competing official market makers in a security. These market makers are required to maintain two-sided markets during exchange hours and are obligated to buy and sell at their displayed bids and offers. They typically do not receive the trading advantages a specialist does, but they do get some, such as the ability to naked short a stock, i.e., selling it without borrowing it. In most situations, only official market makers are permitted to engage in naked shorting.
There are over two thousand market makers in the USA and over a hundred in Canada.
On the London Stock Exchange (LSE) there are official market makers for many securities (but not for shares in the largest and most heavily traded companies, which instead use an automated system called TradElect. Some of the LSE's member firms take on the obligation of always making a two-way price in each of the stocks in which they make markets. It is their prices which are displayed on the Stock Exchange Automated Quotation system, and it is with them that ordinary stockbrokers generally have to deal when buying or selling stock on behalf of their clients.
Proponents of the official market making system claim market makers add to the liquidity and depth of the market by taking a short or long position for a time, thus assuming some risk, in return for hopefully making a small profit. On the LSE one can always buy and sell stock: each stock always has at least two market makers and they are obliged to deal.
This contrasts with some of the smaller order driven markets. On the JSE Securities Exchange, for example, it can be very difficult to determine at what price one would be able to buy or sell even a small block of any of the many illiquid stocks because there are often no buyers or sellers on the order board. However, there is no doubting the liquidity of the big order driven markets in the U.S.
Unofficial market makers are free to operate on order driven markets or, indeed, on the LSE. They do not have the obligation to always be making a two-way price but they do not have the advantage that everyone must deal with them either.
We also have several types of investors, but I want to touch on Day Traders.
Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed before the market close for the trading day. Traders that participate in day trading are called active traders or day traders.
Some of the more commonly day-traded financial instruments are stocks, stock options, currencies, and a host of futures contracts such as equity index futures, interest rate futures, and commodity futures.
Day trading used to be the preserve of financial firms and professional investors and speculators. Many day traders are bank or investment firm employees working as specialists in equity investment and fund management. However, with the advent of electronic trading and margin trading, day trading has become increasingly popular among casual, at home traders.
Trade Frequency
Although collectively called day trading, there are many styles within day trading. Scalping is an intra-day technique that usually has the trader holding a position for a few minutes. Shaving is a method introduced by http://TradingStrategies.com which allows the trader to jump ahead by a tenth of a cent, and a full round trip (a buy and a sell order) is often completed in under one second. Instead of bidding $10.20 per share, the scalper will jump the bid at $10.201 becoming the best bid and therefore the first in line to be able to purchase the stock. When the best "Offer" is $10.21, the shaver will again jump first in line and sell a tenth of a cent cheaper at $10.209 for a profit of 0.008 of a dollar. The profits add up when using 10,000 share lots each time and the combined earnings from Rebates (read below) for creating liquidity. A day trader is actively searching for potential trading setups (that is, any stock or other financial instruments that, in the judgment of the day trader, is in a tension state, ready to accelerate in price in either direction, that when traded well has a potential for a substantial profit). The number of trades you can make per day are almost unlimited, as are the profits and losses.
Some day traders focus on very short-term trading within the trading day, in which a trade may last just a few minutes. Day traders may buy and sell many times in a trading day and may receive trading fee discounts from their broker for this trading volume.
Some day traders focus only on price momentum, others on technical patterns, and still others on an unlimited number of strategies they feel can be profitable.
Some day traders exit positions before the market closes to avoid any and all unmanageable risks --- negative price gaps (differences between the previous day's close and the next day's open bull price) at the open --- overnight price movements against the position held. Other traders believe they should let the profits run, so it is acceptable to stay with a position after the market closes.
Day traders sometimes borrow money to trade. This is called margin trading. Since margin interests are typically only charged on overnight balances, the trader pays no fees for the margin benefit, although they still run the risk of a Margin call. The margin interest rate is usually based on the Broker's call.
Profit and Risks
Because of the nature of financial leverage and the rapid returns that are possible, day trading can be either extremely profitable or extremely unprofitable, and high-risk profile traders can generate either huge percentage returns or huge percentage losses. Some day traders manage to earn millions per year solely by day trading.
Because of the high profits (and losses) that day trading makes possible, these traders are sometimes portrayed as "bandits" or "gamblers" by other investors. Some individuals, however, make a consistent living from day trading.
Nevertheless day trading can be very risky, especially if any of the following is present while trading:
• trading a loser's game/system rather than a game that's at least winnable,
• trading with poor discipline (ignoring your own day trading strategy, tactics, rules),
• inadequate risk capital with the accompanying excess stress of having to "survive",
• incompetent money management (i.e. executing trades poorly).
The common use of buying on margin (using borrowed funds) amplifies gains and losses, such that substantial losses or gains can occur in a very short period of time. In addition, brokers usually allow bigger margins for day traders. Where overnight margins required to hold a stock position are normally 50% of the stock's value, many brokers allow pattern day trader accounts to use levels as low as 25% for intraday purchases. This means a day trader with the legal minimum $25,000 in his or her account can buy $100,000 worth of stock during the day, as long as half of those positions are exited before the market close. Because of the high risk of margin use, and of other day trading practices, a day trader will often have to exit a losing position very quickly, in order to prevent a greater, unacceptable loss, or even a disastrous loss, much larger than his or her original investment, or even larger than his or her total assets.
History
Originally, the most important U.S. stocks were traded on the New York Stock Exchange. A trader would contact a stockbroker, who would relay the order to a specialist on the floor of the NYSE. These specialists would each make markets in only a handful of stocks. The specialist would match the purchaser with another broker's seller; write up physical tickets that, once processed, would effectively transfer the stock; and relay the information back to both brokers. Brokerage commissions were fixed at 1% of the amount of the trade, i.e. to purchase $10,000 worth of stock cost the buyer $100 in commissions.
One of the first steps to make day trading of shares potentially profitable was the change in the commission scheme. In 1975, the United States Securities and Exchange Commission (SEC) made fixed commission rates illegal, giving rise to discount brokers offering much reduced commission rates.
Financial Settlement
Financial settlement periods used to be much longer: Before the early 1990s at the London Stock Exchange, for example, stock could be paid for up to 10 working days after it was bought, allowing traders to buy (or sell) shares at the beginning of a settlement period only to sell (or buy) them before the end of the period hoping for a rise in price. This activity was identical to modern day trading, but for the longer duration of the settlement period. But today, to reduce market risk, the settlement period is typically three working days. Reducing the settlement period reduces the likelihood of default, but was impossible before the advent of electronic ownership transfer.
Electronic Communication Networks
The systems by which stocks are traded have also evolved, the second half of the twentieth century having seen the advent of Electronic Communication Networks (ECNs). These are essentially large proprietary computer networks on which brokers could list a certain amount of securities to sell at a certain price (the asking price or "ask") or offer to buy a certain amount of securities at a certain price (the "bid".
ECNs and exchanges are usually known to traders by a three- or four-letter designators, which identify the ECN or exchange on Level II stock screens. The first of these was Instinet (or "inet"), which was founded in 1969 as a way for major institutions to bypass the increasingly cumbersome and expensive NYSE, also allowing them to trade during hours when the exchanges were closed. Early ECNs such as Instinet were very unfriendly to small investors, because they tended to give large institutions better prices than were available to the public. This resulted in a fragmented and sometimes illiquid market.
The next important step in facilitating day trading was the founding in 1971 of NASDAQ --- a virtual stock exchange on which orders were transmitted electronically. Moving from paper share certificates and written share registers to "dematerialized" shares, computerized trading and registration required not only extensive changes to legislation but also the development of the necessary technology: online and real time systems rather than batch; electronic communications rather than the postal service, telex or the physical shipment of computer tapes, and the development of secure cryptographic algorithms.
These developments heralded the appearance of "market makers": the NASDAQ equivalent of a NYSE specialist. A market maker has an inventory of stocks to buy and sell, and simultaneously offers to buy and sell the same stock. Obviously, it will offer to sell stock at a higher price than the price at which it offers to buy. This difference is known as the "spread". It is of no importance to the market-maker whether the price of a stock goes up or down, as it has enough stock and capital to constantly buy for less than it sells. Today there are about 500 firms who participate as market-makers on ECNs, each generally making a market in four to forty different stocks. Without any legal obligations, market-makers were free to offer smaller spreads on ECNs than on the NASDAQ. A small investor might have to pay a $0.25 spread (e.g. he might have to pay $10.50 to buy a share of stock but could only get $10.25 for selling it), while an institution would only pay a $0.05 spread (buying at $10.40 and selling at $10.35.
Technology Bubble (1997–2000)
In 1997, the SEC adopted "Order Handling Rules" which required market-makers to publish their best bid and ask on the NASDAQ. Another reform made during this period was the "Small Order Execution System", or "SOES", which required market makers to buy or sell, immediately, small orders (up to 1000 shares) at the MM's listed bid or ask. A defect in the system gave rise to arbitrage by a small group of traders known as the "SOES bandits", who made fortunes buying and selling small orders to market makers.
The existing ECNs began to offer their services to small investors. New brokerage firms which specialized in serving online traders who wanted to trade on the ECNs emerged. New ECNs also arose, most importantly Archipelago ("arca") and Island ("isld"). Archipelago eventually became a stock exchange and in 2005 was purchased by the NYSE. (At this time, the NYSE has proposed merging Archipelago with itself, although some resistance has arisen from NYSE members.) Commissions plummeted. To give an extreme example (trading 1000 shares of Google), an online trader in 2005 might have bought $300,000 of stock at a commission of about $10, compared to the $3,000 commission the trader would have paid in 1974. Moreover, the trader was able in 2005 to buy the stock almost instantly and got it at a cheaper price.
ECNs are in constant flux. New ones are formed, while existing ones are bought or merged. As of the end of 2006, the most important ECNs to the individual trader were:
• Instinet (which bought Island in 2002),
• Archipelago (although technically it is now an exchange rather than an ECN),
• the Brass Utility ("brut"), and
• the SuperDot electronic system now used by the NYSE.
• This combination of factors has made day trading in stocks and stock derivatives (such as ETFs) possible. The low commission rates allow an individual or small firm to make a large number of trades during a single day. The liquidity and small spreads provided by ECNs allow an individual to make near-instantaneous trades and to get favorable pricing. High-volume issues such as Intel or Microsoft generally have a spread of only $0.01, so the price only needs to move a few pennies for the trader to cover his commission costs and show a profit.
• The ability for individuals to day trade coincided with the extreme bull market in technological issues from 1997 to early 2000, known as the Dot-com bubble. From 1997 to 2000, the NASDAQ rose from 1200 to 5000. Many naive investors with little market experience made huge profits buying these stocks in the morning and selling them in the afternoon, at 400% margin rates.
• Adding to the day-trading frenzy were the enormous profits made by the "SOES bandits" who, unlike the new day traders, were highly-experienced professional traders able to exploit the arbitrage opportunity created by SOES.
• In March, 2000, this bubble burst, and a large number of less-experienced day traders began to lose money as fast, or faster, than they had made during the buying frenzy. The NASDAQ crashed from 5000 back to 1200; many of the less-experienced traders went broke, although obviously it was possible to have made a fortune during that time by shorting or playing on volatility.
Techniques
The following are several basic strategies by which day traders attempt to make profits. Besides these, some day traders also use contrarian (reverse) strategies (more commonly seen in algorithmic trading) to trade specifically against irrational behavior from day traders using these approaches.
Some of these approaches require shorting stocks instead of buying them normally: the trader borrows stock from his broker and sells the borrowed stock, hoping that the price will fall and he will be able to purchase the shares at a lower price. There are several technical problems with short sales --- the broker may not have shares to lend in a specific issue, some short sales can only be made if the stock price or bid has just risen (known as an "uptick"), and the broker can call for the return of its shares at any time. Some of these restrictions (in particular the uptick rule) don't apply to trades of stocks that are actually shares of an exchange-traded fund (ETF).
The Securities and Exchange Commission removed the uptick requirement for short sales on July 6, 2007.
Trend Following
Trend following, a strategy used in all trading time-frames, assumes that financial instruments which have been rising steadily will continue to rise, and vice versa with falling. The trend follower buys an instrument which has been rising, or short sells a falling one, in the expectation that the trend will continue.
Contrarian Investing
Contrarian investing is a market timing strategy used in all trading time-frames. It assumes that financial instruments which have been rising steadily will reverse and start to fall, and vice versa with falling. The contrarian trader buys an instrument which has been falling, or short-sells a rising one, in the expectation that the trend will change.
Range Trading
Range trading, or range-bound trading, is a trading style in which stocks are watched that have either been rising off a support price or falling off a resistance price. That is, every time the stock hits a high, it falls back to the low, and vice versa. Such a stock is said to be "trading in a range", which is the opposite of trending. The range trader therefore buys the stock at or near the low price, and sells (and possibly short sells) at the high. A related approach to range trading is looking for moves outside of an established range, called a breakout (price moves up) or a breakdown (price moves down), and assume that once the range has been broken prices will continue in that direction for some time.
Scalping
Scalping was originally referred to as spread trading. Scalping is a trading style where small price gaps created by the bid-ask spread are exploited. It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds.
Scalping highly liquid instruments for off the floor day traders involves taking quick profits while minimizing risk (loss exposure). It applies technical analysis concepts such as over/under-bought, support and resistance zones as well as trendline, trading channel to enter the market at key points and take quick profits from small moves. The basic idea of scalping is to exploit the inefficiency of the market when volatility increases and the trading range expands.
Rebate Trading
Rebate Trading is an equity trading style that uses ECN rebates as a primary source of profit and revenue. Most ECNs charge commissions to customers who want to have their orders filled immediately at the best prices available, but the ECNs PAY commissions to buyers or sellers who "add liquidity" by placing limit orders that create "market-making" in a security. Rebate traders seek to make money from these rebates and will usually maximize their returns by trading low priced, high volume stocks. This enables them to trade more shares and contribute more liquidity with a set amount of capital, while limiting the risk that they will not be able to exit a position in the stock. Rebate trading was pioneered at Domestic Securities, founded by Harvey Houtkin the author of "Soes Bandits". Later this strategy was taken from Domestic Securities to Momentum Securities over the MarketXT ECN with the MPID LSPD. The rebate trading group at Momentum Securities / Tradescape was responsible for the $280 million buyout from online trading giant E*Trade.
News Playing
News playing is primarily the realm of the day trader. The basic strategy is to buy a stock which has just announced good news, or short sell on bad news. Such events provide enormous volatility in a stock and therefore the greatest chance for quick profits (or losses). Determining whether news is "good" or "bad" must be determined by the price action of the stock, because the market reaction may not match the tone of the news itself. The most common cause for this is when rumors or estimates of the event (like those issued by market and industry analysts) were already circulated before the official release, and prices have already moved in anticipation---the news is already priced in the stock.
Price action
Keeping things simple can also be an effective methodology when it comes to trading. There are groups of traders known as "Price Action Traders" who are a form of technical traders that rely on technical analysis but do not rely on conventional indicators to point them in the direction of a trade or not. These traders rely on a combination of price movement, chart patterns, volume, and other raw market data to gauge whether or not they should take a trade. This is seen as a "simplistic" and "minimalist" approach to trading but is not by any means easier than any other trading methodology. It requires a sound background in understanding how markets work and the core principles within a market, but the good thing about this type of methodology is it will work in virtually any market that exists (Stocks, Forex, Futures, Gold, Oil, etc.).
Artificial Intelligence
As computers gain processing power (see Moore's law) it has become easier to leverage this to evaluate the market on a deeper level. A method of using Artificial Intelligence to weigh news events was created by http://www.warpedai.com. This method tracks words and phrases in news articles, and then takes the change in price as an action indicating whether the word or phrase is positive or negative. Over years, hundreds of uses of each phrase would give words a strong positive or negative relationship. This technology can then be leveraged to explore the historical significance of a news item.
Cost
Trading Equipment
Some day trading strategies (including scalping and arbitrage) require relatively sophisticated trading systems and software. This software can cost up to $45,000 or more. Many day traders use multiple monitors or even multiple computers to execute their orders. Some use real time filtering software which is programmed to send stock symbols to a screen which meet specific criteria during the day, such as displaying stocks that are turning from positive to negative.
A fast Internet connection, such as broadband, is essential for day trading.
Brokerage
Day traders do not use retail brokers because they are slower to execute trades and charge higher commissions than direct access brokers, who allow the trader to send their orders directly to the ECNs. Direct access trading offers substantial improvements in transaction speed and will usually result in better trade execution prices (reducing the costs of trading). Outside the US, day traders will often use CFD or financial spread betting brokers for the same reasons.
Commission
Commissions for direct-access brokers are calculated based on volume. The more you trade, the cheaper the commission is. While a retail broker might charge $10 or more per trade regardless of the trade size, a typical direct-access broker may charge as little as $0.004 per share traded, or $0.25 per futures contract. A scalper can cover such costs with even a minimal gain.
As for the calculation method, some use pro-rata to calculate commissions and charges, where each tier of volumes charge different commissions. Other brokers use a flat-rate, where all commissions charges are based on which volume threshold one reaches.
Spread
The numerical difference between the bid and ask prices is referred to as the bid-ask spread. Most worldwide markets operate on a bid-ask-based system.
The ask prices are immediate execution (market) prices for quick buyers (ask takers) while bid prices are for quick sellers (bid takers). If a trade is executed at quoted prices, closing the trade immediately without queuing would not cause a loss because the bid price is always less than the ask price at any point in time.
The bid-ask spread is two sides of the same coin. The spread can be viewed as trading bonuses or costs according to different parties and different strategies. On one hand, traders who do NOT wish to queue their order, instead paying the market price, pay the spreads (costs). On the other hand, traders who wish to queue and wait for execution receive the spreads (bonuses). Some day trading strategies attempt to capture the spread as additional, or even the only, profits for successful trades.
Market Data
Market data is necessary for day traders, rather than using the delayed (by anything from 10 to 60 minutes, per exchange rules) market data that is available for free. A real-time data feed requires paying fees to the respective stock exchanges, usually combined with the broker's charges; these fees are usually very low compared to the other costs of trading. The fees may be waived for promotional purposes or for customers meeting a minimum monthly volume of trades. Even a moderately active day trader can expect to meet these requirements, making the basic data feed essentially "free."
In addition to the raw market data, some traders purchase more advanced data feeds that include historical data and features such as scanning large numbers of stocks in the live market for unusual activity. Complicated analysis and charting software are other popular additions. These types of systems can cost from tens to hundreds of dollars per month to access.
Regulations and Restrictions
Day trading is considered a risky trading style, and regulations require brokerage firms to ask whether the clients understand the risks of day trading and whether they have prior trading experience before entering the market.
Pattern Day Trader
In addition, NASD and SEC further restrict the entry by means of "pattern day trader" amendments. Pattern day trader is a term defined by the SEC to describe any trader who buys and sells a particular security in the same trading day (day trades), and does this four or more times in any five consecutive business day period. A pattern day trader is subject to special rules, the main rule being that in order to engage in pattern day trading the trader must maintain an equity balance of at least $25,000 in a margin account.
So I hope this helped anyone who is just coming in or thinking of coming into a position with Summit city Grand Resort and Casino Holdings Corporation. I know it took me a long while to get to know how it all works, and I am still learning every day. I have a sneaking suspicion that this little penny stock will become a dollar stock in the near future.
I may in fact be the only who believes this, but I do strongly and honestly believe in the people who are running the project. They have a track record of success on a grand scale.
--- Mephistopheles “the Robber Baron”---
The following is my opinion and my opinion only and should not be taken as anything other than my opinion. I am long winded so get a cup of coffee and a sandwich before you start. No animals were harmed in the formation of the following post.
I would like see this stock get to .0001, while not popular among most investors there is a reason.
My theory is these Market Makers can cover their losses on this and yogi and booboo(bears)can move off this board with their negative rhetorical bashing tactics and on to any number of others that they try to drive down.
Although certain anonymous posters claim to have no affiliation/ reason to be here other than to make sure that potential investors are informed, evidence shows that for a year they have been diligently posting on this board with their negative banter up to ten times per day.
The action itself: Posting here multiple times for times per for over a year.
While I am no expert in human behavioral psychology I do that that most people perform actions for a reason. No one decides on whim to start running coast to coast besides Forest Gump, and even he had circumstances that lead to his journey beginning. (Sh*t Happens, and Have A Nice Day)
No one sits in front of their computer reading and posting for a year posting diligently ever day try to drive down the price of a stock by calling partners and officers names, studying tax records, making site visits, running background checks, and running at the mouth (keyboard) doing everything that their dynamic duel tag can possible muster in their mutual admiration society (Star Trek reference).
In my opinion this stock has more chance to succeed than almost any other because of the people who are involved with the corporation.
The point of my post today is identifying the trends not only in the stock, but also on this board. (Bears and the Bulls)
The bears and the bulls have fought many rounds as the the two symbolic beasts of finance, and I am sure that everyone is familiar with it, but for those who are not I am going to site a little information.
Wikipedia: Bear and the Bull (http://en.wikipedia.org/wiki/Market_trend)
A market trend is a putative prevailing course or tendency of a financial market to move in a particular direction over time.[1] These trends are classified as secular trends (long term), primary trends (mid-term) and secondary trends (short-term).[2] The concept of a market trend is used in technical analysis and is inconsistent with the efficient-market hypothesis.[3][4]
Technical analysis utilizes the concept that market trends or market cycles occur with a certain degree of regularity and predictability and consideration of market trends is common to many investors.[5] The terms bull market and bear market describe upward and downward market trends respectively and can be used to describe either the market as a whole or specific sectors and securities (stocks).[6]
Secular market trends
A secular market trend is a long-term trend that lasts 5 to 25 years and consists of a series of sequential primary trends.
In a secular bull market the prevailing trend is bullish or upward moving. The United States was described as being in a secular bull market from about 1983 to 2000 (or 2007), with brief upsets including the crash of 1987 and the dot-com bust of 2000–2002.
In a secular bear market, the prevailing trend is bearish or downward moving. An example of a secular bear market was seen in gold during the period between January 1980 to June 1999, culminating with the Brown Bottom. During this period the nominal gold price fell from a high of $850/oz ($30/g) to a low of $253/oz ($9/g),[7] and became part of the Great Commodities Depression.
Primary market trends
A primary trend has broad support throughout the entire market or market sector and lasts for a year or more.
Bull market
A bull market is associated with increasing investor confidence, and increased investing in anticipation of future price increases capital gains. A bullish market trend in the stock market often begins before the general economy shows clear signs of recovery.
Examples
India's Bombay Stock Exchange Index, SENSEX, was in a bull market trend for almost five years from April 2003 to January 2008 as it increased from 2,900 points to 21,000 points. Another notable and recent bull market was in the 1990s when the U.S. and many other global financial markets rose due to the dot-com bubble.
Bear market
A bear market is a general decline in the stock market over a period of time.[8] It is a transition from high investor optimism to widespread investor fear and pessimism.
According to The Vanguard Group, "While there’s no agreed-upon definition of a bear market, one generally accepted measure is a price decline of 20% or more over at least a two-month period."[9]
Examples
A bear market followed the Wall Street Crash of 1929 and erased 89% (from 386 to 40) of market capitalization by July 1932, marking the start of the Great Depression. After regaining nearly 50% of its losses, a longer bear market from 1937 to 1942 occurred in which the market was again cut in half. Another long-term bear market occurred from about 1973 to 1982, encompassing the stagflation of U.S. economy, the 1970s energy crisis, and the high unemployment of the early 1980s. Yet another bear market occurred between March 2000 and October 2002. The most recent example occurred between October 2007 and March 2009.
Market top
A market top is usually not a dramatic event. The market has simply reached the highest point that it will, for a few years, although of course people don't know that at the time. A decline then follows, usually gradually at first and later with more rapidity.
Examples
The peak of the dot-com bubble (as measured by the NASDAQ-100) occurred on March 24, 2000. The index closed at 4,704.73 and has not since returned to that level.
A recent peak for the broad U.S. market was October 9, 2007. The S&P 500 index closed at 1,565.15 and it is currently (Novemeber 2009) about 30% down from there.
Market bottom
A market bottom is a trend reversal, the end of a market downturn, and precedes the beginning of an upward moving trend (bull market).
It is very difficult to identify a bottom (referred to by investors as "bottom picking") while it is occurring. The upturn following a decline is often short-lived and prices might resume their decline. This would bring a loss for the investor who purchased stock(s) during a misperceived or "false" market bottom.
Baron Rothschild is said to have advised that the best time to buy is when there is "blood in the streets", i.e., when the markets have fallen drastically and investor sentiment is extremely negative.[10]
Examples
Some examples of market bottoms, in terms of the closing values of the Dow Jones Industrial Average (DJIA) include:
• The Dow Jones Industrial Average hit a bottom at 1738.74 on 19 October 1987, as a result of the decline from 2722.41 on 25 August 1987. This day was called Black Monday. (Chart[11]).
• A bottom of 7286.27 was reached on the DJIA on 9 October 2002 as a result of the decline from 11722.98 on 14 January 2000. This included an intermediate bottom of 8235.81 on 21 September 2001 which led to an intermediate top of 10635.25 on 19 March 2002 (Chart[12]). The "tech-heavy" Nasdaq fell a more precipitous 79% from its 5132 peak (10 March 2000) to its 1108 bottom (10 October 2002).
• A decline associated with the Subprime mortgage crisis starting at 14164.41 on 9 October 2007 (DJIA) and caused a short term bottom of 11740.15 on 10 March 2008. After a rallying to a temporary top on 2 May 2008 at 13058.20 the primary trend of the declining, "bear" market, resumed. (Chart[13]).
Secondary market trends
Secondary trends are short-term changes in price direction within a primary trend. The duration is a few weeks or a few months.
One type of secondary market trend is called a market correction. A correction is a short term price decline of 5% to 20% or so.[14]
Another type of secondary trend is called a bear market rally which consist of an market price increase of 10% to 20%. Bear market rallies occurred in the Dow Jones index after the 1929 stock market crash leading down to the market bottom in 1932, and throughout the late 1960s and early 1970s. The Japanese Nikkei stock average has been typified by a number of bear market rallies since the late 1980s while experiencing an overall long-term downward trend.
Investor sentiment
Investor sentiment is a contrarian stock market indicator.
By definition, the market balances buyers and sellers, so that there is a balance between positive and negative sentiment. Thus it is impossible for a high proportion of market participants to have negative sentiment. However it is possible to argue that when a high proportion of financial commentators and advisors express a bearish (negative) sentiment, some people consider this as a strong signal that a market bottom may be near. The predictive capability of such a signal (see also market sentiment) is thought to be highest when investor sentiment reaches extreme values.[15] Indicators that measure investor sentiment may include[citation needed]:
•
o Investor Intelligence Sentiment Index: If the Bull-Bear spread (% of Bulls - % of Bears) is close to a historic low, it may signal a bottom.
o American Association of Individual Investors (AAII) sentiment indicator: Many feel that the majority of the decline has already occurred once this indicator gives a reading of minus 15% or below.
o Other sentiment indicators include the Nova-Ursa ratio, and Short Interest/Total Market Float
Market capitulation
Market capitulation refers to the threshold reached after a severe fall in the market, when large numbers of investors can no longer tolerate the financial losses incurred.[16] These investors then capitulate (give up) and sell in panic, or find that their pre-set sell stops have been triggered, thereby automatically liquidating their holdings in a given stock. This may trigger a further decline in the stock's price, if not already anticipated by the market. Margin calls and mutual fund and hedge fund redemptions significantly contribute to capitulations.[citation needed]
The contrarians consider a capitulation a sign of a possible bottom in prices. This is because almost everyone who wanted (or was forced) to sell stock has already done so, leaving the buyers in the market, and they are expected to drive the prices up.
The peak in volume may precede an actual bottom.
Etymology
The precise origin of the phrases "bull market" and "bear market" are obscure. The Oxford English Dictionary cites an 1891 use of the term "bull market". In French "bulle spéculative" refers to a speculative market bubble. The Online Etymology Dictionary relates the word "bull" to "inflate, swell", and dates its stock market connotation to 1714.[17]
One hypothetical etymology points to London bearskin "jobbers" (market makers),[citation needed] who would sell bearskins before the bears had actually been caught in contradiction of the proverb ne vendez pas la peau de l'ours avant de l’avoir tué ("don't sell the bearskin before you've killed the bear")—an admonition against over-optimism.[citation needed] By the time of the South Sea Bubble of 1721, the bear was also associated with short selling; jobbers would sell bearskins they did not own in anticipation of falling prices, which would enable them to buy them later for an additional profit.
Another plausible origin is from the word "bulla" which means bill, or contract. When a market is rising, holders of contracts for future delivery of a commodity see the value of their contract increase. However in a falling market, the counterparties—the "bearers" of the commodity to be delivered—win because they have locked in a future delivery price that is higher than the current price.[citation needed]
Some analogies that have been used as mnemonic devices:
• Bull is short for 'bully', in its now mostly obsolete meaning of 'excellent'.
• It relates to the common use of these animals in blood sport, i.e bear-baiting and bull-baiting.
• It refers to the way that the animals attack: a bull attacks upwards with its horns, while a bear swipes downwards with its paws.
• It relates to the speed of the animals: bulls usually charge at very high speed whereas bears normally are thought of as lazy and cautious movers—a misconception because a bear, under the right conditions, can outrun a horse.[18]
• They were originally used in reference to two old merchant banking families, the Barings and the Bulstrodes.
• Bears hibernate, while bulls do not.[citation needed]
• The word "bull" plays off the market's returns being "full" whereas "bear" alludes to the market's returns being "bare".
In describing financial market behavior, the largest group of market participants is often referred to, metaphorically, as a herd. This is especially relevant to participants in bull markets since bulls are herding animals. A bull market is also sometimes described as a bull run. Dow Theory attempts to describe the character of these market movements.[19]
International sculpture team Mark and Diane Weisbeck were chosen to re-design Wall Street's Bull Market. Their winning sculpture, the "Bull Market Rocket" was chosen as the modern, 21st century symbol of the up-trending Bull Market.
What we have here on this board is a very simple version of the bulls and the bears.
Bulls: Some of us are Bulls and would like to see this stock grow and prosper into a water park, imax theater, concert hall, and casino.
Bears: Others would like to see it never happen and the stock nose dive to .0001 and be delisted, or at least go low enough that they themselves can buy the float, or cover a loss, or maybe take over the company. Who knows whatever the reason is. What most people did not know is that there is money to be made when the stock goes down as well.
There has been rumor and speculation that Naked Shorting has occurred in this stock, I also believe this to be true. However I see no clear evidence of the act here. Although it is a very common practice in the market. After a year you think this would be given up on. But then again no one likes to loose money.
Naked short selling, or naked shorting, is the practice of selling a financial instrument short without first borrowing the security or ensuring that the security can be borrowed as is done in a conventional short sale. When the seller does not obtain the shares within the required time frame, the result is known as a "fail to deliver". The transaction generally remains open until the shares are acquired by the seller or the seller's broker, allowing the trade to be settled.[1] Naked short selling can be used to manipulate the price of securities by driving their price down, and its use in this way is illegal.[2] However, the practice is considered benign under certain circumstances, such as trading by market makers.[3]
In the United States, naked short selling is covered by various SEC regulations which prohibit the practice.[4] In 2005, "Regulation SHO" was enacted, requiring that broker-dealers have grounds to believe that shares will be available for a given stock transaction, and requiring that delivery take place within a limited time period.[3][5] As part of its response to the crisis in the North American markets in 2008, the SEC issued a temporary order restricting short-selling in the shares of 19 financial firms deemed systemically important, by reinforcing the penalties for failing to deliver the shares in time.[6] Effective September 18, 2008, amid claims that aggressive short selling had played a role in the failure of financial giant Lehman Brothers, the SEC extended and expanded the rules to remove exceptions and to cover all companies.[7][8]
Some commentators have contended that despite regulations, naked shorting is widespread and that the SEC regulations are poorly enforced. Its critics have contended that the practice is susceptible to abuse, can be damaging to targeted companies struggling to raise capital, and has led to numerous bankruptcies.[4][7][9] However, other commentators have said that the naked shorting issue is a "devil theory",[10] not a bona fide market issue and a waste of regulatory resources.[11]
Normal shorting
Main article: Short (finance)
Short selling is a form of speculation that allows a trader to take a "negative position" in a company. Conventionally, the trader will "borrow" securities from a current shareholder, typically a bank or prime broker, agreeing to return them on demand. The seller delivers these shares to a buyer, who takes full ownership and likely does not know that he is participating in a short sale. When the seller wants to "unwind" the position, he buys back equivalent shares in the market and returns them to the lender.
This short/borrow system provides the trader with shares to sell at current prices, in the hope that he will profit by repurchasing them later when the price has lowered. Because the seller/borrower is generally required to make a deposit for the full share price with the lender, it also provides the lender with interest on a position that he was not actively trading.
Naked shorts in the United States
Naked short selling is a case of short selling without first arranging a borrow. If the stock is in short supply, finding shares to borrow can be difficult. The seller may also decide not to borrow the shares, in some cases because lenders are not available, or because of the costs of lending. When shares are not borrowed within the clearing time period and the short-seller does not tender shares to the buyer, the trade is considered to have "failed to deliver."[12] Nevertheless, the trade will continue to sit open or the buyer may be credited the shares by the DTCC until either the short-seller closes out the position or borrows the shares.
It is difficult to measure how often naked short selling occurs. Fails to deliver are not necessarily indicative of naked shorting, and can result from both "long" transactions (stock purchases) and short sales.[3][13] Naked shorting can be invisible in a liquid market, as long as the short sale is eventually delivered to the buyer. However, if the covers are impossible to find, the trades fail. Fail reports are published regularly by the SEC[14], and a sudden rise in the number of fails-to-deliver will alert the SEC to the possibility of naked short selling. In some recent cases, it was claimed that the daily activity was larger than all of the available shares, which would normally be unlikely.[12]
Extent of naked shorting
The reasons for naked shorting, and the extent of it, have been disputed for several years before the SEC's 2008 action to prohibit the practice. What is generally recognized is that naked shorting tends to happen when shares are difficult to borrow. Studies have shown that naked short selling also increases in correlation with the cost of borrowing.
In recent years, a number of companies have been accused of using naked shorts in aggressive efforts to drive down share prices, sometimes with no intention of ever delivering the shares.[12][15] These claims focus on the fact that, at least in theory, the practice allows an unlimited number of shares to be sold short. A Los Angeles Times editorial in July 2008 said that naked short selling "enables speculators to drive down a company's stock by offering an overwhelming number of shares for sale."[16] The SEC, however, says that naked shorting is sometimes falsely asserted as a reason for a share price decline, when in fact "the price decrease is a result of the company's poor financial situation rather than the reasons provided by the insiders or promoters."[3]
Before 2008, regulators had generally downplayed the extent of naked shorting in the US. At a North American Securities Administrators Association (NASAA) conference on naked short selling in November 2005, an official of the New York Stock Exchange stated that NYSE had not found evidence of widespread naked short selling. In 2006, an official of the SEC said that "While there may be instances of abusive short selling, 99% of all trades in dollar value settle on time without incident."[17] Of all those that do not, 85% are resolved within 10 business days and 90% within 20.[17] That means that about 1% of shares that change hands daily, or about $1 billion per day, are subject to delivery failures,[2] although the SEC has stated that "fails-to-deliver can occur for a number of reasons on both long and short sales," and accordingly that they do not necessarily indicate naked short selling.[3][13]
In 2008, SEC chairman Christopher Cox said that the SEC "has zero tolerance for abusive naked short-selling" while implementing new regulations to prohibit the practice, culminating in the September 2008 action following the failures of Bear Sterns and Lehman Brothers amidst speculation that naked short selling had played a contributory role.[8][18] Cox said that "the rule would be designed to ensure transparency in short-selling in general, beyond the practice of naked short-selling."[8]
Claimed effects of naked shorting
As with the prevalence of naked shorting, the effects are contested. The SEC has stated that the practice can be beneficial in enhancing liquidity in difficult-to-borrow shares, while others have suggested that it adds efficiency to the securities lending market. Critics of the practice argue that it is often used for market manipulation, that it can damage companies and even that it threatens the broader markets.
One complaint about naked shorting from targeted companies is that the practice dilutes a company's shares for as long as unsettled short sales sit open on the books. This has been alleged to create "phantom" or "counterfeit" shares, sometimes going from trade to trade without connection to any physical shares, and artificially depressing the share price.[15] However, the SEC has disclaimed the existence of counterfeit shares and stated that naked short selling would not increase a company's outstanding shares.[5] Short seller David Rocker contended that failure to deliver securities "can be done for manipulative purposes to create the impression that the stock is a tight borrow," although he said that this should be seen as a failure to deliver "longs" rather than "shorts."[19]
Robert J. Shapiro, former undersecretary of commerce for economic affairs, and a consultant to a law firm suing over naked shorting,[20] has claimed that naked short selling has cost investors $100 billion and driven 1,000 companies into the ground.[9]
Richard Fuld, the former CEO of the financial firm Lehman Brothers, during hearings on the bankruptcy filing by Lehman Brothers and bailout of AIG before the House Committee on Oversight and Government Reform alleged that a host of factors including a crisis of confidence and naked short selling attacks followed by false rumors contributed to both the collapse of Bear Stearns and Lehman Brothers.[21] The Wall Street Journal's Dealbook blog said that Fuld was "obsessed" with short sellers, and that "when Fuld was questioned about the shorts’ connection to Goldman, he grumbled that he had no evidence but didn’t sound convinced." House committee Chairman Henry Waxman said the committee received thousands of pages of internal documents from Lehman and these documents portray a company in which there was “no accountability for failure".[22][23][24] In July 2008, U.S. Securities and Exchange Commission chairman Christopher Cox said there was no "unbridled naked short selling in financial issues."[25]
Securities Exchange Act of 1934
The Securities Exchange Act of 1934 stipulates a settlement period up to three business days before a stock needs to be delivered,[12] generally referred to as "T+3 delivery."
[edit] Regulation SHO
The SEC enacted Regulation SHO in January 2005 to target abusive naked short selling by reducing failure to deliver securities, and by limiting the time in which a broker can permit failures to deliver.[26] In addressing the first, it stated that a broker or dealer may not accept a short sale order without having first borrowed or identified the stock being sold.[27] The rule had the following exemptions:
1. Broker or dealer accepting a short sale order from another registered broker or dealer
2. Bona-fide market making
3. Broker-dealer effecting a sale on behalf of a customer that is deemed to own the security pursuant to Rule 200[28] through no fault of the customer or the broker-dealer.[27]
To reduce the duration for which fails to deliver are permitted to sit open, the regulation requires broker-dealers to close-out open fail-to-deliver positions in threshold securities that have persisted for 13 consecutive settlement days.[26] The SEC, in describing Regulation SHO, stated that failures to deliver shares that persist for an extended period of time "may result in large delivery obligations where stock settlement occurs."[26]
Regulation SHO also created the "Threshold Security List," which reported any stock where more than 0.5% of a company's total outstanding shares failed delivery for five consecutive days. A number of companies have appeared on the list, including Krispy Kreme, Martha Stewart Omnimedia and Delta Airlines. The Motley Fool, an investment website, observes that "when a stock appears on this list, it is like a red flag waving, stating 'something is wrong here!'"[12] However, the SEC clarified that appearance on the threshold list "does not necessarily mean that there has been abusive naked short selling or any impermissible trading in the stock."[26]
In July 2006, the SEC proposed to amend Regulation SHO, to further reduce failures to deliver securities.[29] SEC Chairman Christopher Cox referred to "the serious problem of abusive naked short sales, which can be used as a tool to drive down a company's stock price." and that the SEC is "concerned about the persistent failures to deliver in the market for some securities that may be due to loopholes in Regulation SHO.[30]
[edit] Developments, 2007 to the present
In March 2007, the Securities and Exchange Board of India (SEBI), which disallowed short sales altogether in 2001 as a result of the Ketan Parekh affair, reintroduced short selling under regulations similar to those developed in the United States. In conjunction with this rule change, SEBI outlawed all naked short selling.[31][32]
In June 2007, the SEC voted to remove the grandfather provision that allowed fails-to-deliver that existed before Reg SHO to be exempt from Reg SHO. SEC Chairman Christopher Cox called naked short selling "a fraud that the commission is bound to prevent and to punish." The SEC also said it was considering removing an exemption from the rule for options market makers.[33] Removal of the grandfather provision and naked shorting restrictions generally have been endorsed by the U.S. Chamber of Commerce.[34]
In March 2008, SEC Chairman Christopher Cox gave a speech entitled the "'Naked' Short Selling Anti-Fraud Rule," in which he announced new SEC efforts to combat naked short selling.[35] Under the proposal, the SEC would create an antifraud rule targeting those who knowingly deceive brokers about having located securities before engaging in short sales, and who fail to deliver the securities by the delivery date. Cox said the proposal would address concerns about short-selling abuses, particularly in the market for small-cap stocks. Even with the regulation in place, the SEC received hundreds of complaints in 2007 about alleged abuses involving short sales. The SEC estimated that about 1% of shares that changed hands daily, about $1 billion, were subject to delivery failures. SEC Commissioners Paul Atkins and Kathleen Casey expressed support for the crackdown.[36][37]
In mid-July 2008, the SEC announced emergency actions to limit the naked short selling of government sponsored enterprises (GSEs), such as Fannie Mae and Freddie Mac, in an effort to limit market volatility of financial stocks.[38] But even with respect to those stocks the SEC soon thereafter announced there would be an exception with regard to market makers.[39] SEC Chairman Cox noted that the emergency order was "not a response to unbridled naked short selling in financial issues", saying that "that has not occurred". Cox said, "rather it is intended as a preventative step to help restore market confidence at a time when it is sorely needed."[25] Analysts warned of the potential for the creation of price bubbles.[39][40]
The emergency actions rule expired August 12, 2008.[41][42][43][44] However, at September 17, 2008, the SEC issued new, more extensive rules against naked shorting, making "it crystal clear that the SEC has zero tolerance for abusive naked short selling". Among the new rules is that market makers are no longer given an exception. As a result, options market makers will be treated in the same way as all other market participants, and effectively will be banned from naked short selling.[45]
On November 4, 2008, voters in South Dakota considered a ballot initiative, "The South Dakota Small Investor Protection Act", to end naked short selling in that state. The Securities Industry and Financial Markets Association of Washington and New York said they would take legal action if the measure passed.[46] The voters defeated the initiative.[47]
In May 2009, the New York Times's chief financial correspondent Floyd Norris reported that naked shorting is "almost gone." He said that delivery failures, where they occur, are quickly corrected.[48]
In July 2009, the SEC, under what the Wall Street Journal described as "intense political pressure," made permanent an interim rule that obliges brokerages to promptly buy or borrow securities when executing a short sale.[49] The SEC said that since the fall of 2008, fails to deliver in all equity securities declined by about 57 percent, and the average daily number of threshold list securities declined from a high of about 582 securities in July 2008 to 63 in March 2009.[50]
[edit] Regulations outside of the United States
Several international exchanges have either partially or fully restricted the practice of naked short selling of shares. They include Australia's Australian Securities Exchange,[51] India's Securities and Exchange Board,[52] the Netherlands's Euronext Amsterdam,[53] Japan's Tokyo Stock Exchange,[54] and Switzerland's SWX Swiss Exchange.[55][56]
Japan's naked shorting ban started on November 4, 2008, and was originally scheduled to run until July 2009, but was extended through October of that year.[57][58] Japan's Finance Minister, Shōichi Nakagawa stated, "We decided (to move up the short-selling ban) as we thought it could be dangerous for the Tokyo stock market if we do not take action immediately." Nakagawa added that Japan's Financial Services Agency would be teaming with the Securities and Exchange Surveillance Commission and Tokyo Stock Exchange to investigate past violations of Japanese regulations on stock short-selling.[59]
The Singapore Exchange started to penalize naked short sales with an interim measure in September, 2008. These initial penalties started at $100 per day. In November, they announced plans to increase the fines for failing to complete trades. The new penalties would penalize traders who fail to cover their positions, starting at $1,000 per day. There would also be fines for brokerages who fail to use the exchange's buying-in market to cover their positions, starting at $5,000 per day. The Singapore exchange had stated that the failure to deliver shares inherent in naked short sales threatened market orderliness.[60]
Regulatory enforcement actions
In 2005, the SEC notified Refco of intent to file an enforcement action against the securities unit of Refco for securities trading violations concerning the shorting of Sedona stock. The SEC sought information related to two former Refco brokers who handled the account of a client, Amro International, which shorted Sedona's stock.[61] No charges had been filed by 2007.
In December 2006, the SEC sued Gryphon Partners, a hedge fund, for insider trading and naked short-selling involving PIPEs in the unregistered stock of 35 companies. PIPEs are "private investments in public equities," used by companies to raise cash. The naked shorting took place in Canada, where it was legal at the time. Gryphon denied the charges.[62]
In March 2007, Goldman Sachs was fined $2 million by the SEC for allowing customers to illegally sell shares short prior to secondary public offerings. Naked short-selling was allegedly used by the Goldman clients. The SEC charged Goldman with failing to ensure those clients had ownership of the shares. SEC Chairman Cox said "That is an important case and it reflects our interest in this area."[63]
In June 2007, executives of Universal Express, which had claimed naked shorting of its stock, were sanctioned by a federal court judge as "repeated and remorseless violators" of the securities laws. The SEC asserted that the company "appears to exist primarily as a vehicle for fraud."[64] Referring to a court ruling barring CEO Richard Altomare from serving as an officer of a public company, New York Times columnist Floyd Norris said: "In Altomare's view, the issues that bothered the judge are irrelevant. 'Long and short of it,' he said in a statement, 'this is a naked short hallmark case in the making.' Or it is proof that it can take a long time for the SEC to stop a fraud."[65] Universal Universal Express claimed that 6,000 small companies had been put out of business by naked shorting, which the company said "the SEC has ignored and condoned."[66] A receiver was subsequently appointed to administer the company.
In July 2007, Piper Jaffray was fined $150,000 by the New York Stock Exchange (NYSE). Piper violated securities trading rules from January through May 2005, selling shares without borrowing them, and also failing to "cover short sales in a timely manner", according to the NYSE.[67] At the time of this fine, the NYSE had levied over $1.9 million in fines for naked short sales over seven regulatory actions.[68]
Also in July 2007, the American Stock Exchange fined two options market makers for violations of Regulation SHO. SBA Trading was sanctioned for $5 million, and ALA Trading was fined $3 million, which included disgorgement of profits. Both firms and their principals were suspended from association with the exchange for five years. The exchange said the firms used an exemption to Reg. SHO for options market makers to "impermissibly engage in naked short selling."[69][70][71]
In October 2007, the SEC settled charges against New York hedge fund adviser Sandell Asset Management Corp. and three executives of the firm for, among other things, shorting stock without locating shares to borrow. Fines totalling $8 million were imposed, and the firm neither admitted nor denied the charges.[72]
In October 2008 Lehman Brothers Inc. was fined $250,000 by the Financial Industry Regulatory Authority (FINRA) for failing to properly document the ownership of short sales as they occurred, and for failing to annotate an affirmative declaration that shares would be available by the settlement date.[73]
Litigation and DTCC
The Depository Trust and Clearing Corporation (DTCC) has been criticized for its approach to naked short selling.[2][74] DTCC has been sued with regard to its alleged participation in naked short selling, and the issue of DTCC's possible involvement has been taken up by Senator Robert Bennett and discussed by the NASAA and in articles in the Wall Street Journal and Euromoney Magazine.
There is no dispute that illegal naked shorting happens,[2][75] what is in dispute is how much it happens, and to what extent is DTCC to blame.[2][76] Some companies with falling stocks blame DTCC as the keeper of the system where it happens, and say DTCC turns a blind eye to the problem.[2] Referring to trades that remain unsettled, DTCC's chief spokesman Stuart Goldstein said, "We're not saying there is no problem, but to suggest the sky is falling might be a bit overdone."[77][78] In July 2007, Senator Bennett suggested on the U.S. Senate floor that the allegations involving DTCC and naked short selling are "serious enough" that there should be a hearing on them with DTCC officials by the Senate Banking Committee, and that banking committee chairman Christopher Dodd has expressed a willingness to hold such a hearing.[79]
Critics also contend DTCC has been too secretive with information about where naked shorting is taking place.[2] Ten suits concerning naked short-selling filed against the DTCC were withdrawn or dismissed by May 2005.[80]
A suit by Electronic Trading Group, naming major Wall Street brokerages, was filed in April 2006 and dismissed in December 2007.[81][82]
Two separate lawsuits, filed in 2006 and 2007 by NovaStar Financial, Inc. shareholders and Overstock.com, named as defendants ten Wall Street prime brokers. They claimed a scheme to manipulate the companies' stock by allowing naked short selling.[83] A motion to dismiss the Overstock suit was denied in July 2007.[84][85]
A suit against DTCC by Pet Quarters Inc. was dismissed by a federal court in Arkansas, and upheld by the Eighth Circuit Court of Appeals in March 2009.[86] Pet Quarters alleged the Depository Trust & Clearing Corp.'s stock-borrow program resulted in the creation of nonexistent or phantom stock and contributed to the illegal short selling of the company's shares. The court ruled: "In short, all the damages that Pet Quarters claims to have suffered stem from activities performed or statements made by the defendants in conformity with the program's Commission approved rules. We conclude that the district court did not err in dismissing the complaint on the basis of preemption." Pet Quarters' complaint was almost identical to suits against DTCC brought by Whistler Investments Inc. and Nanopierce Technologies Inc. The suits also challenged DTCC's stock-borrow program, and were dismissed.[87]
Studies
A study of trading in initial public offerings by two SEC staff economists, published in April 2007, found that excessive numbers of fails to deliver were not correlated with naked short selling. The authors of the study said that while the findings in the paper specifically concern IPO trading, "The results presented in this paper also inform a public debate surrounding the role of short selling and fails to deliver in price formation."[88]
In contrast, a study by Leslie Boni in 2004 found correlation between "strategic delivery failures" and the cost of borrowing shares. The paper, which looked at a "unique dataset of the entire cross-section of U.S. equities," credited the initial recognition of strategic delivery fails to Richard Evans, Chris Geczy, David Musto and Adam Reed, and found its review to provide evidence consistent with their hypothesis that "market makers strategically fail to deliver shares when borrowing costs are high."
An April 2007 study conducted for Canadian market regulators by Market Regulation Services Inc. found that fails to deliver securities were not a significant problem on the Canadian market, that "less than 6% of fails resulting from the sale of a security involved short sales" and that "fails involving short sales are projected to account for only 0.07% of total short sales."[89][90]
A Government Accountability Office study, released in June 2009, found that recent SEC rules had apparently reduced abusive short selling, but that the SEC needed to give clearer guidance to the brokerage industry.[91]
Coverage in newspapers and magazines
While concern expressed by the regulator has been echoed by journalists, some commentators contend that naked short selling is not harmful and that its prevalence has been exaggerated by corporate officials seeking to blame external forces for their own shortcomings.[92] Others have discussed naked short selling as a confusing or bizarre form of trading.[15][93]
Reviewing the SEC's July 2008 emergency order, Barron's said in an editorial: "Rather than fixing any of the real problems with the agency and its mission, Cox and his fellow commissioners waved a newspaper and swatted the imaginary fly of naked short-selling. It made a big noise, but there's no dead bug."[11] Holman Jenkins of the Wall Street Journal said the order was "an exercise in symbolic confidence-building" and that naked shorting involved technical concerns except for subscribers to a "devil theory".[10] The Economist said the SEC had "picked the wrong target", mentioning a study by Arturo Bris of the Swiss International Institute for Management Development who found that trading in the 19 financial stocks became less efficient.[94] The Washington Post expressed approval of the SEC's decision to address a "frenetic shadow world of postponed promises, borrowed time, obscured paperwork and nail-biting price-watching, usually compressed into a few high-tension days swirling around the decline of a company."[95] The Los Angeles Times called the practice of naked short selling "hard to defend," and stated that it was past time the SEC became active in addressing market manipulation.[96]
The Wall Street Journal said in an editorial in July 2008 that "the Beltway is shooting the messenger by questioning the price-setting mechanisms for barrels of oil and shares of stock." But it said the emergency order to bar naked short selling "won't do much harm," and said "Critics might say it's a solution to a nonproblem, but the SEC doesn't claim to be solving a problem. The Commission's move is intended to prevent even the possibility that an unscrupulous short seller could drive down the shares of a financial firm with a flood of sell orders that aren't backed by an actual ability to deliver the shares to buyers."[97]
The Washington Post's Frank Ahrens described naked shorting as "far more dangerous than sexy" in a July, 2008 article. "It's a frenetic shadow world of postponed promises, borrowed time, obscured paperwork and nail-biting price-watching, usually compressed into a few high-tension days swirling around the decline of a company," Ahrens says.[98]
In an article published in October 2009, Rolling Stone writer Matt Taibbi contended that Bear Stearns and Lehman Brothers were flooded with "counterfeit stock" that helped kill both companies. Taibbi said that the two firms got a "push" into extinction from naked short-selling.[99] However, this was disputed in an article in The Big Money, a financial news website operated by Slate.com, citing, inter alia, a study by finance researchers at the University of Oklahoma Price College of Business, which found "no evidence that stock price declines were caused by naked short selling."[100].
So to conclude, does shorting exist, you bet it does. Did it happen here? In my opinion yes it has.
In the end only we will never know if there is a market maker or financial institution involved in trying to keep this stock down.
What we are left with is the Bulls and Bears.
I am proud to be a Bull and would like nothing more than to see this project move forward.
Other Famous Bulls:
Red Rock
Little Yellow Jacket
Michael Jordan
Scottie Pippen
Best of luck to you Summit City Grand Resort and Casino Holdings Corporation!
--Mephistopheles the Robber Baron--
I have been watching for months and invested a while back, but there is a rumor out there that prompted me to sign up for Ihub and put my two cents in.
I chose my name because of the Robber Barons and the windfall profits they made and I hope to see something like that with EXTO.
This stock has been just sitting here for so many months I was ready to just walk away, but I heard that things were going to happen towards the end of 2009, not only from the original interviews but also all over the city. With the Governor switching his position and supporting a gaming option to help keep Hoosier money in Indiana I decided I would stick it out.
I was reading over the months here and did not know if this was Linda (rosesandsunshine )
http://www.legacy.com/obituaries/fortwayne/obituary.aspx?n=belinda-j-smith-linda&pid=135582314
I hope to see some productivity, I am not going to wait as long for something to happen here. Get it in gear EXTO.
Lets see some productivity this week. We have been stuck on one penny for the last twelve months and it is getting old.