Friday, Oct. 11, 2002 | 11:18 a.m.
Park Place Entertainment Corp. Chief Executive Officer Thomas Gallagher on Wednesday purchased 25,000 shares of stock at $6.38 per share and another 25,000 shares at $6.20, according to two separate filings Thursday with the Securities and Exchange Commission.
Also this week, Mandalay Resort Group Chief Financial Officer Glenn Schaeffer sold 733,333 shares for $24 million.
Gallagher has bought more of his company's own shares this year than any other top executive of a major Las Vegas-based gaming company, purchasing 65,000 in February and another 20,000 shares in August. He now owns 320,479 shares of Park Place common stock in addition to about 2.6 million stock options that are set to expire over a period of several years, beginning in 2007.
Park Place stock has slid more than 20 percent since last week, when the company announced it would reduce its earnings guidance from previous estimates. The company primarily blamed lower than expected returns at its Caesars Palace casino in Las Vegas, which suffered from losses to gamblers at its high-roller tables and disruptions in business due to ongoing construction projects.
A run up in casino stocks yielded heavy insider selling earlier this year. But the tide appears to be shifting, according to one Wall Street analyst.
In the third quarter, insiders purchased $8.7 million of company stock and sold about $16.9 million, Bear, Stearns & Co. analyst Jason Ader wrote in a research note today. That compares to $1 billion in sales and only $32.4 million in purchases in 2001.
"In our view, when coupled with an attractive valuation, these insider purchases are a positive signal to the market," Ader wrote.
In the third quarter, Harrah's Entertainment Inc. Chief Executive Officer-elect Gary Loveman bought $4.9 million shares of Harrah's. Media mogul Sumner Redstone acquired 270,500 shares of slot maker WMS Industries for about $3.4 million. In the fourth quarter, Redstone bought another 14,000 shares of WMS for $206,000.
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