The company results season is not so much a season as a rolling programme nowadays given the focus of most equity investors on short investment cycles and quick returns. In many cases a firm’s quarterly returns attract as much media coverage and analysis as the annual ones.
Added to this phenomenon is a growing habit among embattled casino operators—including those with interests in Macau—of making additional announcements on the progress of the business, rather like elementary school teachers reporting on the progress of little Jack and Jill to anxious parents (aka investors). This is perhaps not surprising, given the tanking seen in most casino stocks in the last six months and the nervousness of many stockholders. Las Vegas Sands, Wynn Resorts, MGM MIRAGE and others have all been producing mid-term progress reports in the last week or two.
This interest shown by investors in every detail of a company’s balance sheet has no doubt been sparked by a general desire to make capital work that much harder during a downturn. It’s probably been exacerbated in the case of Macau by the regional squeeze on VIP player credit and other local issues such as visa rationing by the Chinese government on its citizens’ trips to Macau.
But company results, interim reports and their inevitable accompanying media releases can be as interesting for what they are not required to cover as for what they are either compelled because of accounting rules, or expected on grounds of common sense, to report.
For the whole jigsaw image to become clearer it can sometimes require a little extra reading of filings to regulatory bodies such as the US Securities and Exchange Commission on disclosure of material events.
This was witnessed in November 2008 with the filing by Las Vegas Sands Corp.’s auditors to the SEC highlighting the potential threat to LVS as a going concern.
Even a powerful regulator may not be able to demand transparency in every aspect of a public company’s business. A good example in Macau is the contentious use by some operators of figures indicating VIP table games win as a percentage of turnover, as our sister publication Inside Asian Gaming discusses in the May edition of the magazine. Teasing out these sometimes dense but nonetheless important issues is in theory at least where financial analysts and journalists have a role to play.
