Gaming execs sell shares on rising prices

By Liz Benston (contact)

Tuesday, June 24, 2003 | 10:57 a.m.

Several Las Vegas casino executives and directors unloaded millions of shares last week after news of a cash dividend at Mandalay Resort Group the week before sent casino stocks soaring.

Two executives at Mandalay Resort Group each sold more than 800,000 shares of company stock last week after news of a company dividend sent shares soaring, helping the company rank near the top of the list in insider sales at U.S. companies last week.

Chief Executive Officer Michael Ensign and Vice Chairman William Richardson each sold roughly 822,000 shares from transactions dated June 17 through June 19, securities filings show. The sales reduced their holdings from about 5 million shares to about 4.2 million shares outstanding. Sales prices averaged about $33 per share.

Mandalay's stock last week had its biggest bump since last October. That month, Chief Financial Officer Glenn Schaeffer announced his intent to sell more than 733,000 shares worth roughly $24.6 million.

Also last week, Mandalay director Arthur Bilger exercised 35,000 options at prices ranging from about $14.50 to $17.48 and sold the same number of shares for around $33 per share. Bilger reduced his holdings to 1,000 shares from 36,000 shares.

Mandalay executives could not be reached for comment about the sales.

Also last week, Harrah's Entertainment Inc. Chairman Philip Satre sold 45,000 shares at about $43.14 per share and disposed of another 23,325 shares through private sales. That compares to 281,884 shares Satre unloaded the previous month.

Harrah's Director Joe Henson sold 3,100 shares at about $43.25 per share. The day of Mandalay's June 12 announcement, Harrah's Senior Vice President Marilyn Winn exercised 27,378 options at prices ranging from $14.31 per share to $26.06 per share and then sold the shares for about $42.

From June 11 to June 12, Harrah's Chief Operating Officer Timothy J. Wilmott exercised 83,843 options at about $14.31 per share and then sold the shares for about $41 per share. Henson sold 105,000 shares for about $41 over the same period.

Analysts said the transactions marked opportunistic moves by executives rather than any indication of a change in company strategy.

"I don't think the insider sales are indicative of a change in fundamentals," Deutsche Bank analyst Marc Falcone said. "We think the outlook for Las Vegas, particularly over the next several months, continues to be strong."

"There was a very publicized dividend announcement and a highly publicized" appreciation in stock prices afterward, Fulcrum Global Partners analyst Joe Greff said.

Tom Baker, chief executive of slot maker International Game Technology, acquired roughly 25,000 shares through private transactions last week. Executive Vice President Robert Bittman sold 4,282 shares at a price of $96.08 each.

This month Mandalay Resort Group became the first major casino operator in recent years to begin paying a quarterly dividend. The 23-cent dividend was partly a response to a federal tax cut on dividends recently passed by President George W. Bush, the company said.

Some Wall Street analysts raised their ratings on Mandalay after the late afternoon announcement June 12, which sent the company's stock up more than 10 percent the following day. Shares of other major casino operators rose from 2 to 4 percent that day, with analysts projecting other companies to follow suit based on their ability to generate future cash and limit capital spending projects.