(Bloomberg) -- Wynn Resorts Ltd. fell the most in more than five weeks after the company replaced the president of a Macau subsidiary who led the development of its new $4.2 billion Wynn Palace resort following a sluggish opening in August.
Wynn dropped 2.5 percent to $98.04 at 12:08 p.m. in New York, and slid as much as 5.8 percent, the biggest intraday decline since Aug. 24. Wynn Macau shares closed down 2.4 percent in Hong Kong.
Gamal Abdelaziz resigned as president of Wynn Macau, and was replaced by Ian Coughlan, the Las Vegas-based company said Friday in a filing. Coughlan will be responsible for all operations and development at the Wynn Palace, as well as the Wynn Macau resort, the company said. The Palace opened on Aug. 22, and the part that caters to mass-market customers has been lackluster in its first weeks, analysts said.
Abdelaziz's “departure should be an indication that the post-opening ramp of the Palace has been disappointing,” Harry Curtis, an analyst at Nomura Securities, wrote in a note Friday. “It will take a long time to build a mass presence at the Palace, which was built more for premium players.”
Wynn Resorts plans to release opening numbers for the resort at an unspecified time, the company said Friday in an e-mail.
The Palace opened following a two-year a slump in gambling in Macau. Betting in the former Portuguese colony tumbled after a government crackdown on corruption on mainland China prompted a sharp drop in business. Analysts are now warning that gaming may take another hit when Chinese Premier Li Keqiang travels to Macau in October to attend a conference. Gambling rose 1.1 percent in August.
“Historically, visits to Macau by high-level PRC officials have had short-term negative impacts on gross gaming revenue and we expect this same dynamic to occur in October,” said Grant Govertsen, a Macau-based analyst at Union Gaming.
Curtis at Nomura noted that once the colony's new light-rail system is operational, the Palace could achieve a 10 percent return on invested capital, though he said initial gains should be closer to mid-single digits.
--With assistance from Lisa Pham To contact the reporters on this story: Lisa Wolfson in Boston at lwolfson@bloomberg.net, Joshua Fineman in New York at jfineman@bloomberg.net. To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Rob Golum
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