For the next four months, the stock basically treaded water. However, in March, Ichanged my view. Considering how quickly Macau traffic had been growing at the time and China's bounce from its recent stimulus, I suggested that the past risks I had mentioned were far outweighed. I said there was a substantial jump coming in the stock.
That's exactly what has happened. Macau has only continued to explode since the spring. Most of the market (including me) was also surprised at how successful the opening of Marina Bay Sands has been in Singapore. It seems that folks in that part of Asia are just as excited to gamble at a top resort as the Mainland Chinese are in Macau.
Since the spring, Las Vegas Sands' stock has gone from $20 to around $50 today.
The question now, of course, is, where does the stock go from here? I'm still as bullish as ever on Las Vegas Sands' stock and think it could double again over the next 12 months.
Yet, on Thursday last week, the stock suddenly dropped in the middle of the day from nearly $52 to $47. The reason for the move was that the Macau government refused Las Vegas Sands' request to proceed with developing Lots 7 and 8 on the Cotai Strip.
Las Vegas Sands can and most likely will appeal. The company has 15 days to do this and another 15 days after that, if the company can take it to a court procedure. I expect it will.
In the last few days, there has been lots of analyst speculation about why the Macau government rejected the land premise without disclosing any reason. The market likely fears that:
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