Leisure/Hotels

Candy Crush maker picks $7.6 bln IPO from thin air

12 Mar 2014

King Digital uses creative metrics like MGABPPU to justify its whopping valuation. But there’s no way to calculate what an enterprise is worth when its profit can skyrocket 70-fold one year and could collapse the next. Rival Zynga’s IPO flub serves as an apposite warning.

Apollo and TPG try to stack the deck at Caesars

19 Feb 2014

The private equity duo gambled poorly with a 2008 buyout of the casino empire, which has hired Lazard to help it restructure. A $24 bln debt marker led the firms to stash some Caesars aces elsewhere. Junior bondholders are learning that even with a bad hand the house has an edge.

Travel tech IPO charts familiar round trip

28 Jan 2014

Seven years after taking airline reservations operator Sabre private for $5 bln, TPG and Silver Lake are making the return journey to public markets. It’s one of many big buyouts that should land safely despite a badly timed takeoff. The tardiness will cost investors, though.

Blackstone stock tells similar tale to Hilton’s

4 Dec 2013

The buyout firm’s traded units are at last nearing their $31 debut price of 2007. The recovery coincides with a profitable float of the hotelier, a $27 bln deal Blackstone struck the same year. While the results diverge for investors, both speak to private equity’s timing nous.

Macau results show not all casinos can be winners

1 Nov 2013

Gambling in the former colony has boomed this year as high rollers defy China’s slowing growth and corruption crackdown. Most gaming stocks have doubled in the past twelve months. But disappointing results from MGM point to growing competitive pressures.

Netflix could turn troublesome euphoria into useful cash

22 Oct 2013

The online video company’s stock has quadrupled since January. CEO Reed Hastings warns that momentum investors are too euphoric. Diluting the punchbowl is a better way to calm this rowdy party - and answer doubts about its balance sheet.

Fantasy sports re-engineered as fantasy investment

17 Oct 2013

Wall Street and Silicon Valley have spawned a love child called Fantex, a market for investing in the actual earnings of pro athletes. The proposal sounds like a sports junkie’s dream. In reality, it’s fraught with risks. Fans should lace up their sneakers and run away.

John Malone wraps digital riddle inside an enigma

10 Oct 2013

The U.S. cable magnate’s Liberty Interactive is creating two tracking stocks, each with two classes of shares, and spinning off a stake in TripAdvisor. Only Malone could form a more labyrinthine structure in the name of simplification. Complexity may offset any value creation.

Odds shorten on big change at Ladbrokes

26 Sep 2013

A profit warning sent shares in the British bookmaker down 8 pct. The big headache is the trickier-than-expected switch to a new digital platform, but margins are weak across the board. It’s been a horrid few months. The chances of a takeover or a management cull are rising.

Blackstone engineers an upgrade during Hilton stay

12 Sep 2013

The private equity firm is starting the checkout process with an IPO six years after its $27 bln buyout. At current industry values, Hilton would bring Blackstone an IRR of about 13.5 pct. That’s no five-star return but it’s quite a turnaround from how prospects once looked.

Accor’s newest broom would sweep governance aside

27 Aug 2013

The French hotel group’s board reckons appointing the head of its leading private equity shareholder as CEO can revive its fortunes. True, Colony’s Sebastien Bazin may speed up the sale of real-estate assets. But investors need to weigh short-term gains against a loss of control.

Thomas Cook turnaround can travel on in style

16 May 2013

Shares of the UK holiday firm are up tenfold since CEO Harriet Green joined last July. Its 1.6 bln stg refinancing and rights issue failed to knock the stock partly because it shows Thomas Cook has found new strength. Operational success suggests the recovery still has legs.

Caesars deal blinds market with science

24 Apr 2013

The U.S. casino empire’s private equity owners Apollo and TPG are following last year’s microscopic IPO with a spinoff and rights issue concoction. Aiming to raise $1.2 bln, the transaction mostly seems like a complex financial experiment to buy time for the ailing $31 bln LBO.

SeaWorld IPO may not make second investment splash

3 Jan 2013

Blackstone is ready to take public amusement parks it bought in 2009 from Anheuser-Busch for a headline price of $2.3 bln. Including dividends already taken, the buyout shop could end up trebling its money. But new buyers expecting similar returns should beware getting soaked.

Avis gives Zipcar a faster lane to profitability

2 Jan 2013

Selling to the mainstream car rental giant for $500 mln means a 32 pct loss for those who bought Zipcar’s shares in its 2011 IPO. But tapping into Avis’s underused fleet should boost the car-sharing company’s margins. And for Avis owners, cost savings justify the 49 pct premium.

TripAdvisor deal excludes regular shareholders

12 Dec 2012

Barry Diller sold shares in the internet travel group to Liberty Interactive at a 63 pct premium. John Malone’s group paid up to regain voting control over its other shares. As so often where there’s supervoting stock, the moguls’ games have left ordinary owners powerless.

Disney chief’s unlikely fairy godfather: Murdoch

21 Nov 2012

With News Corp snapping up a piece of the Yankees TV network, Bob Iger’s battle with Rupert Murdoch is becoming more intense. But News Corp’s rich price for the deal implies a punchy valuation for Disney’s much-coveted ESPN. That could make the whole Magic Kingdom worth more.

Not all internet investors are irrational fools

9 Nov 2012

The reaction to Priceline’s $1.8 bln deal for rival travel website Kayak is a case in point. With no synergies or obvious industrial logic, it’s nice to see Priceline owners thwack the shares for the company’s adventurism. Internet stocks shouldn’t be a free pass to get stupid.

Google searches for local edge with guidebook deal

13 Aug 2012

Frommer’s may be better known among frugal travelers with comfortable shoes than digital kids. Yet Google’s purchase of the publisher looks like a smart way to further its push into the booming local online ad market, building on last year’s purchase of Zagat.

Priceline books industry ticket back to reality

8 Aug 2012

The travel site’s strong growth and lock on small European hotels convinced investors it was worth as much as $38 bln. But disappointing second-quarter results from it and rival Orbitz have burst the bubble. And Priceline faces the added problem of growing competition.