Non-stick SPAC: The news that Wynn Resorts and the Austerlitz SPAC vehicle had mutually agreed to terminate their merger didn’t come as too much of a shock for the analysts following the comments earlier in the week from Wynn’s results call. The deal announced in May would have valued Wynn Interactive at $3.2bn but Wynn appeared to pull the rug under its own plans by suggesting, in the words of departing CEO Matt Maddox, that the current economics of online sports-betting didn’t stack up at present.
Reading the runes: As Deutsche Bank suggested, while “somewhat surprising” the news will not have been completely out of the blue for anyone reading the tea leaves, particularly with the announcement that interactive CEO Craig Billings was taking over as Wynn Resorts CEO from Matt Maddox. Billings was keen to reiterate Wynn’s continued commitment to WynnBet, but he said on Friday that it was now pivoting to a “more targeted ROI-focused strategy” which would be “less capital intensive” as of Q122. “WynnBet’s best days lie ahead of us,” he said. But the analysts at Jefferies were not so sure.
“The growth strategy for Wynn Interactive remains less defined than some of its peers,” the Jefferies team added.
Corporate Yoga: Returning from a recent Las Vegas visit, the Wells Fargo team suggested there was some empathy among rival management teams for the “difficult position” Wynn finds itself in. Views are now split, with some thinking this is a “natural step in the evolution of the industry where the big get bigger and smaller operators have a tougher path to profitability/scale.”
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