Wynn stock trades higher even after mistaken filing

Wynn Resorts Ltd. shares closed higher Friday even after the gaming company had to retract a regulatory filing that said it had approval for a major new resort in Macau.

Shares gained more than
6 percent after Wynn Resorts told the U.S. Securities and Exchange Commission it had a lease agreement from the Chinese government for a 51-acre resort on Macau's Cotai Strip.

But about an hour after markets opened, trading was briefly halted, and the Las Vegas-based company published a retraction. The company said that there was no agreement and that the filing was an accident.

The erroneous Form 8-K filing was submitted to the SEC by a clerk at Skadden, Arps, Slate, Meagher & Flom LLP, the New York City law firm that represents Wynn Resorts.

"We learned earlier today that a clerk in our filing department inadvertently made an unauthorized filing with respect to Wynn Resorts Ltd.," the firm's statement said. "We apologize that this mistake occurred. We have taken steps to rectify the situation as quickly as possible and are reviewing what occurred to ensure that it cannot happen in the future."

Wynn Resorts shares were up
6.31 percent when trading was halted. When trading resumed just before noon EST, shares opened up only 2 percent, but they started climbing again, surging by as much as 8.6 percent.

At the close, Wynn Resort shares were up 4.27 percent, or $5.21, to $127.27 on extremely heavy volume of 14.1 million shares traded on the Nasdaq. Over the past 30 days, Wynn Resorts has averaged 2.64 million shares traded daily.

The stock might have closed higher because many investors still believe that Wynn is close to getting approval for its latest Macau project, even if the filing was declared erroneous, Sterne, Agee & Leach analyst David Bain said in an interview.

The depth and specificity of the filing made it look legitimate, and many investors are betting that Wynn simply filed it earlier than it meant to, Bain said.

"The perspective is ... that they have this in the hopper," Bain said. "Even if they pulled it back, they had it ready to go."

Bain said that was a risky bet because the land deal could still be scuttled. The accidental filing itself might strain Wynn's relationship with Chinese authorities.

"I can't imagine that the Macau government is going to wake up in the morning and feel incredibly excited about this coming out," Bain said.

In the erroneous report, Wynn Resorts said its Wynn Macau subsidiary's lease agreement was published in January in the official gazette of Macau. In the retraction, it acknowledged the publication never happened.

Wynn Resorts on Friday declined comment beyond its statement that the "form was filed by mistake."

The incorrect filing comes on the heels of company Chairman Steve Wynn's forcible buyout of 24 million shares, roughly a 20 percent stake, held by former business partner Kazuo Okada.

Wynn accused Okada of violating U.S. anti-corruption laws, based on information gained from an internal probe of Okada's separate dealings in gaining a license for a major gaming resort in the Philippines.

Wynn Resorts, Las Vegas Sands Corp. and MGM Resorts International have benefited from the strong growth of gambling in Macau, as more and more residents from mainland China visit the former Portuguese colony next to Hong Kong.

The company operates two properties in Macau, Wynn Macau and Encore at Wynn Macau.

Wynn Resorts said revenue at its Macau properties increased 9 percent in the fourth quarter, to $995.5 million.

Macau gaming officials on Thursday said casino revenues increased 22 percent in February. Macau casinos generated $3.04 billion in revenues last month, according to Macau's Gaming Inspection and Coordination Bureau.

The Associated Press contributed to this report. Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.