Late Tuesday, The Wall Street Journal reported that Las Vegas Sands (LVS) is preparing to relaunch its stalled construction projects in Macau, China's hot gambling region. Financial woes forced Las Vegas Sands to walk away from the two construction sites a year ago, but newly secured funding means that the casino company can resume work on the projects as soon as January.
Las Vegas Sands disclosed in a regulatory filing on Monday that it secured $1.45 billion in financing from banks, and the firm is looking to lock down an additional $300 million. The gaming issue is also attempting to raise as much as $3.83 billion by launching an initial public offering (IPO) in Hong Kong of its Macau assets, about $500 million of which will be used to fund construction on the stalled sites.
When Las Vegas Sands walked away from the projects last year, it laid off 11,000 workers. Now that work is beginning again, the company expects to hire 12,000 to 13,000 laborers over the next 12 to 18 months, according to the Journal's sources.
LVS was up more than 4% in early trading as investors cheered the news, and the equity has muscled above its 10-week moving average as a result. This trendline, along with its 20-week counterpart, has guided the security higher since early April, helping LVS to a 2009 gain of 186%. However, the looming $20 level has exerted round-number resistance since mid-September, and could continue to stymie the stock's rally attempts.
Nevertheless, option players are adopting a bullish tone toward LVS. Wednesday's most popular strike early on was the stock's November 19 call, which is out of the money by just a couple of points. A total of 5,623 contracts had crossed the tape at last check, with the majority changing hands at the ask price -- which indicates buying activity. Implied volatility on this option was up 2.1% in early trading, confirming that demand is on the rise for this overhead call strike.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
Serious Money: Cheapest Stocks List Shrinks from 26 to 21
Chasing Value: Hasbro Earnings Makes My Point
MEMC CEO Forgoes Bonus; Money Will Go to Retrain Workers
