Go back to Gambling and Trading - Beating the Spread

Harrah's Entertainment Cancels IPO

Harrah's Entertainment announced some weeks ago that is would hold an IPO, or Initial Public Offering of common stock on the NASDAQ Global Select Market under the 'CZR' for Caesars Entertainment Corporation. Now the company has revealed that they are canceling their IPO due to market conditions.

Harrah's is the owner of numerous casino properties around the world and is the owner of the World Series of Poker brand. They recently launched an online poker venture that is currently only available overseas due to the UIGEA in the U.S. Initially, the IPO had set the stock price between $15 and $17 per share. This was to raise over a half Billion in revenue for the casino giant.

The Financial Times stated the following as the real reason behind the cancellation, 'Senior bankers said they thought Harrah's had asked for too high a price given its prospects and circumstances. Apollo and TPG had managed to extend the duration of the debt used in the buyout, they said, but Harrah's remains highly leveraged and the prospect for economic recovery remains uncertain.'

Harrah's owns numerous casinos in Las Vegas including the Rio, Caesars Palace, Paris, and Planet Hollywood. They purchased the WSOP in 2004 and have grown the brand into an international product. Their online poker accepts echeck poker deposit and awarded a seat into the 2010 Tournament of Champions at the WSOP.

If the IPO had been successful, 31 Million shares of the company would have been up for grabs. Harrah's went private in 2008 when TPG Capital and Apollo Group Management purchased the group. Reports do not show that the companies would have lost any stock in the IPO.

Harrah's will need to work on reducing their debt and moving more towards profitability before an IPO is expected to be successful. With the state of the current economy, it is hard to say when that will happen. Many poker players in the US are playing more online and using different USA poker deposit methods. Other would be players are more concerned about jobs than they are gambling. It may be a while before both the economy and Harrah's recovers financially to the point where an IPO would be feasible.