Las Vegas Sands Still the Best Casino Bet

By Eric Jackson
RealMoney Contributor
12/7/2010 7:45 AM EST
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About a year ago, I took a cautious view on Las Vegas Sands (LVS - commentary - Trade Now), stating that I was troubled by the governance of the company and was worried about some of the risks involved in bringing back Macau and waiting for Las Vegas casino revenue to rebound.

For the next four months, the stock basically treaded water. However, in March, I changed 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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A King Among Casinos

By Eric Jackson
RealMoney Contributor
6/14/2010 5:00 PM EDT
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It's been a rough two months in the market, starting with the surprising SEC charges against Goldman Sachs (GS - commentary - Trade Now), followed by Europe's sovereign-debt woes and the flash crash. Some feared a second financial collapse, until the European Union announced its $1 trillion rescue plan. Then concerns ran amok about a European slowdown that could derail China's economy.

With all this happening, Las Vegas Sands(LVS - commentary - Trade Now) should be sunk into the lows of the year. It's got heavy debt, major exposure to China through its Macau properties, and its U.S. operations are still incredibly weak .

Yet, LVS is up 72% year to date, compared with the S&P 500's 2% decline. It is also outperforming peers with a bigger presence in Macau, such as Wynn Resorts (WYNN -commentary - Trade Now), up 42% for the year, and MGM Mirage (MGM - commentary - Trade Now), up 27% for the year. Even against a smaller U.S. regional player such as Boyd Gaming (BYD - commentary - Trade Now), which has regained a healthy 31% of its stock price this year, LVS is still way ahead.

What's even more remarkable, these healthy gains didn't come in January, followed by a sharp retracement since Europe's troubles began. The stock's gains held up, and even increased through the past six weeks.

Consider Royal Carribbean (RCL - commentary - Trade Now), the ultimate consumer-discretionary purchase. During the "melt up" from January through April, the cruise-ship operator, along with many other retailers and discretionary names, benefited. Its stock gained more than 40%. Then came Goldman, Greece, the flash crash and China worries. Suddenly, investors recalled RCL's heavy debt burden -- $6 billion market capitalization and long-term debt exceeding $8 billion. If RCL were a country, it would be one of the PIIGS (Portugal, Ireland, Italy, Greece and Spain). In fact, RCL has been battered these past six weeks, although it remains up 12% for the year, still good by S&P standards.

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A Pilgrimage to China's Casino Mecca

By Eric Jackson
RealMoney Contributor
3/24/2010 5:00 PM EDT
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I traveled to Macau recently to see how the Las Vegas of the Orient was faring. We've heard endlessly about the potential of Macau, but it's difficult to appreciate until you go there and see it first-hand. My take-away: Macau is working, and stocks associated with it should do well in the years ahead.

This small island at the mouth of the Pearl River is overrun with visitors at the moment. They're coming across the border from China by the busload, or from Hong Kong on high-speed ferries.

Macau was turned into a casino Mecca in the 1960s by Stanley Ho, who held a monopoly for many years and still controls a Hong Kong-listed company, Sociedade de Jogos de Macau, that owns two large casinos here: Lisboa and the newer Grand Lisboa. Both were packed earlier this week with chain-smoking mainlanders gambling midday on a weekday. The clientele appeared a little more lowbrow compared with those at other casinos I visited, but they seemed very happy with their experience from what I saw.

Stanley Ho's daughter, Pansy Ho, entered a joint venture with MGM (MGM - commentary - Trade Now) a few years ago to open an MGM Grand in Macau. During my visit, it seemed the least busy of all the new American casinos in this former Portuguese territory, which reverted to Chinese sovereignty in 1999.

Stanley Ho's son, Lawrence Ho, runs Melco Entertainment (MPEL - commentary - Trade Now), which operates City of Dreams over on the Cotai Strip (one island over from the main island of Macau). City of Dreams, though newer and nicer, wasn't as busy as Stanley Ho's casinos, either.

Wynn Resorts' (WYNN - commentary - Trade Now) casino is extravagant and exactly like the experience you have when you go to Las Vegas. The hotel is one of only three in Asia to receive the coveted Mobil 5 stars. Visitors pass countless high-end shops on their way to the casino floor. However, I was surprised to see relatively low traffic, compared with other casinos I visited. There were noticeably fewer mainland Chinese and more Australians and Hong Kong visitors. When asked, a local denied mainlanders had any bias against Wynn, saying they often returned to the casinos they liked, and "word of mouth" was very important to draw more customers to certain casinos.

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LVS: A Change of Fortune

By Eric Jackson

RealMoney Contributor

3/15/2010 2:00 PM EDT

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On Nov. 10, I wrote on my concerns about casino operator Las Vegas Sands (LVS - commentary - Trade Now) and recommended that investors steer clear of the stock after a big 800% run from the March lows

The risks I cited then included:

Losses will persist without a meaningful upturn in operating performance

Debt requirements will get tighter over the next year

Continued development risk in Macau

Poor corporate governance oversight

Since then, the stock has been stuck in a trading range, rising 2%. However, my view on the stock has turned positive and I'm now long. What's changed? Some risks remain. The risks of tightening debt covenants remain. That will happen this year, so the company will have to continue to perform to meet those. Corporate governance is the same as it ever was. Sands CEO Sheldon Adelson will continue to look out for himself and his family. Investors should continue to expect egregious expenses charged to their tab.

The biggest thing that's happened to make me positive on the stock is that the company's Macau operations have turned up sharply and seem poised to continue in this vein for at least the rest of the year.

Sands' overall Q4 earnings weren't particularly good but, here's the thing. The market is not expecting much from the company's Las Vegas, Pennsylvania or Singapore results. The stock's fortunes rise and fall with the latest news on Macau, and business there seems to be much stronger this quarter and growing.

In the risks I cited in November, I discussed the threat of continuing losses at the company and development risk in Macau. Although LVS has a number of properties there that still need capital to be completed, as the business environment has improved in these last four months, the risk of Sands coming up short has lessened. And with even a slight upturn in Macau revenue, LVS benefits disproportionately relative to its peers -- and that is what's happening at the moment (something the market hasn't yet fully recognized, in my opinion).

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Lucky Levers of Profit

By Eric Jackson

RealMoney Contributor

1/14/2010 1:48 PM EST

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Instead of rolling the dice with casinos, pull the lever at the slots.

The gaming industry is facing long odds these days: a slow recovery after a brutal recession, cash-strapped consumers and expense-shy businesses. Some of the bigger players, such as Las Vegas Sands (LVS - commentary - Trade Now) and MGM Mirage (MGM - commentary - Trade Now), have placed big bets on growth in Asia's gambling Mecca, Macau -- but carry huge debts. Smaller outfits such as Boyd Gaming (BYD - commentary - Trade Now) are focused on Las Vegas and other smaller locales at home, with the attendant limits of potentially disappointing results if consumers stay cautious.

There are hints of a turnaround, but a shaky one. Nevada's recent November gaming numbers told that conflicted story well. Gaming revenues were up for the first time in nearly two years, yet room rates fell. It's good to know the people who came were big spenders, but bigger volumes would mean more dependable levels of cash flowing through. And that's the conundrum for investors in casino stocks in 2010: sector stocks could double if the recovery keeps rolling, or they could half if it turns up snake eyes.

Gaming is a niche sector with sub-niche players, and the slot companies offer investors another angle of play, one I believe deserves a closer look. The slot suppliers have two trends working for them in 2010: orders for upgrades from existing casinos and growing demand from state and local governments.

The Contenders

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Risk of Snake Eyes for Las Vegas Sands

By Eric Jackson

TheStreet.com/RealMoney

11/10/2009 2:36 PM EST

With its stock price is up over 800% since its March lows, Las Vegas Sands (LVS - commentary - Trade Now) plans to raise up to $3.3 billion in a Hong Kong IPO listing of its Asian assets later this month. While it has great potential upside from its properties in gambling territory Macau, there are still a number of risk factors facing the casino that could cause it to trip its debt covenants on its massive $12 billion in liabilities over the next 18 months. Because of those risks and lax corporate governance oversight, I've initiated a short position on the stock. Here's why.

Risk 1: Losses will persist without a meaningful upturn in operating performance. Despite a surge in Macau-based profits and management claims of cutting $500 million in operating costs from the business, Sands still is losing money, and at an increased rate year-on-year. It had over $1 billion in operating expenses in the recent quarter alone. The bet that bulls on the stock are making is that we've hit bottom and that rooms, banqueting and convention revenue will all come back from current levels. On the recent earnings call, management noted that Macau had done particularly well recently, partially because of increased traffic over the October Golden Week holiday. The company pointed out that Las Vegas room bookings were up for January and February. However, the likelihood of a continued soft market in Vegas (especially with MGM's new CityCenter dumping 5,000 new rooms on the strip next month) seems high, even with Macau. It appears reasonable to assume that losses will persist over the next two years, at a time when it's vital for LVS to navigate its way through its debt obligations.

Risk 2: Debt requirements will only get tighter over the next year. Like its losses, Las Vegas Sands' debt and liabilities have increased over the last year. It had $12 billion in debt as of the end of September -- up 13% from a year ago. LVS's biggest risk in holding such a high amount of debt while losing money is meeting its debt covenants, which include tightening the allowed ratio between debt and EBITDA, currently at a ceiling of 6.5:1 for US-related debt. Management says it is now running a ratio of 5.78:1. Starting July 1 2010, the allowed ratio will drop to 6:1. Then, on January 1, 2011, it will drop again to 5.5:1 and stay there.

Sands has been able to sell stock and debt in order to supplement its EBITDA and stay within its debt covenants. Recently, it pre-sold $600 million in projected proceeds from the planned Hong Kong IPO of its Asian assets later this month, presumably because it needed the extra cash early. Once it completes its public offering, it should receive another $1.7-2.5 billion (net of the already-sold $600 million and the bankers' underwriting fees).

The company has three types of debt related to its US, Macau and Singapore (Marina Bay) developments and operations. All senior debt is held by Lehman Brothers Commercial Paper (or affiliated entities). It appears that Alvarez & Marsal (overseeing the wind-down of Lehman) is now in charge of Sands' debt obligations and they have more incentive to play hardball on enforcing terms compared to a troubled Citibank, Bank of America, or Wells Fargo. In an interview with CNBC in July, Bryan Marsal talked -- in general terms, not specifically about Las Vegas Sands -- about how many companies were in phase one of a three-phase discussion with their creditors: (1) extend and pretend (that they will somehow be able to bounce back in order to re-pay their debts), (2) amend (the terms of their covenants -- or at least try), and (3) send (as in, send in the keys for the properties to the creditors).

If Sands defaults on one debt obligation, it triggers a cross-default across all its debts. Assuming the losses continue, its new IPO proceeds will help, but the company will still face potential problems later next year, as its debt-to-EBITDA ratio ratchets down.

Risk 3: Continued development in Macau. According to its most recent 10-Q, Sands estimates it will need approximately $2.6 billion to complete development at Macau. It currently has about $3 billion in cash (about the same level as a year ago), plus the new funds coming in from the Hong Kong IPO. It's likely that Sands will need to keep a certain amount of cash on its balance sheet to satisfy its lenders. This means that, even using all the IPO proceeds, Sands will not necessarily have sufficient cash to finish off Macau -- if losses persist.

Las Vegas Sands is required to finish completion of Parcel 3 of the Cotai strip by mid-2011, or risk passing over the keys to all of its Macau assets to the Chinese government. It also needs to build out parcels 4 to 8 (and receive permission from the government), but not as quickly. It is obviously trying to do everything it can to minimize its development costs (right out of the "extend-and-pretend" playbook). Sheldon Adelson is known for slipping delivery deadlines.

However, there are a number of Macau risks (let alone Singapore) that remain, including the potential for less strong traffic in current and future quarters compared with the recent Golden Week-aided quarter, restrictions on travel to Macau by the Chinese government for fear of over-gambling, Sands's need to spend more on ferry access or face reduced traffic, potential cost overruns on existing development and any potential health scare (like heightened concern about the H1N1 virus) that could reduce traffic. Taken together, it seems likely that one or two of these risks might occur in the next year, with a sharp impact on the stock.

Risk 4: Poor corporate governance oversight. You would think that Sands would be holding on to every dollar of cash possible, seeing as how the stock dropped from $140 to $1 and was being questioned as a going concern less than a year ago. But, you'd be wrong. Corporate governance has and likely always will be very poor at this company. On October 29, Sands declared a quarterly dividend of $2.50 per share to the holders of 10% Series A Cumulative Perpetual Preferred Stock. It's not clear how much of this stock Chairman and Chief Executive Sheldon Adelson himself owns, but we know (from the Sands 2009 proxy statement) that his wife, Dr. Miriam Adelson, bought 5.25 million of these shares from the company on November 14, 2008. That means Adelson's wife will collect $13 million on just this one quarterly dividend payment, or $50 million annually -- roughly 10% of their recent $500 million in total cost savings Sands management boasted about.

My personal favorite egregious expense at Las Vegas Sands involves SVP Rob Goldstein. Goldstein is in charge of Sands' Vegas properties and was front and center on the recent earnings calls. He was paid $3.8 million in total compensation in 2006, $3.2 million in 2007 and $2.6 million in 2008. In the spring of this year, in its proxy statement, Sands disclosed that: "During 2008, a subsidiary of the Company performed work at a home owned by Mr. Goldstein, the Company's Senior Vice President. The Company's cost and overhead for the job was $364,000. Mr. Goldstein believes and the Company agrees that some of the work was not performed in an appropriate manner. The Company and Mr. Goldstein are working together to determine the amount that may be due."

Later, in its second-quarter10-Q release in August, Sands buried in the back under "Other Matters" the following: "As previously disclosed, during 2008, a subsidiary of the Company performed work at a home owned by Robert G. Goldstein, the Company's Executive Vice President. Mr. Goldstein believed, and the Company acknowledged, that some of the work was not performed in an appropriate manner. The matter was referred to an independent expert, who concurred about the quality of the work and concluded that Mr. Goldstein should not be obligated to pay the $0.4 million incurred by the Company for costs and overhead on the job. These findings have been accepted by the Company and Mr. Goldstein."

So, to review, a Sands subsidiary got to do $360,000 worth of remodeling construction work on Goldstein's house - paid for out of the Sands' shareholders' coffers and Goldstein gets to enjoy the benefits of the work for free. Who is this "independent expert" and how can I arrange for him to come and adjudicate some faulty remodeling work paid for by Sands at my house?

Clearly, it's "buyer beware" for shareholders at Las Vegas Sands, and Sands makes no bones about it. One of its "risk factors" listed in their 10-K is that "[t] he interests of Mr. Adelson may conflict with your interests."

The bottom line is that Las Vegas Sands' management is betting that the Macau market will stay hot and that Vegas will come back from historic lows this year. My belief is that one or more of the risks cited above will surprise to the downside within the next year - and that's why I think it's more likely the stock will go lower than this, rather than higher, over the next 12 months.

At the time of publication, Jackson's fund held a net short position in LVS and a long position in WYNN.

Eric Jackson is founder and president of Ironfire Capital and the general partner and investment manager of Ironfire Capital US Fund LP and Ironfire Capital International Fund, Ltd.

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Steve Wynn's Big Cashout

By Eric Jackson 10/07/09 - 06:00 AM EDT

Stock quotes in this article: WYNN , MGM , LVS , EBAY

NEW YORK (TheStreet) -- Steve Wynn and his chief operating officer are pushing back from the table.

Since the end of July, Steve Wynn has sold $114 million worth of shares in Wynn(WYNN Quote) and his Chief Operating Officer Marc Schorr has sold over $7 million. It's the first time in the last decade that Wynn has sold such a large chunk of shares. For Schorr, the proceeds from his sale exceeded his average annual total compensation over the past three years.

For these casino operators, their sales might be a canary in the coal mine to other investors to take some profits on the gains in this sector since the March lows. Since March 9, Wynn is up 343%, MGM(MGM Quote) is up 480% and Las Vegas Sands(LVS Quote) is up a whopping 886%.

The valuations are rich, with Wynn sporting an 80 times forward price-to-earnings ratio, with Las Vegas Sands at 60 times. Meanwhile, Wynn carries a debt load of $4 billion and a meager free cash flow of $456 million. Las Vegas Sands is saddled with $11 billion in debt and $242 million in free cash flow. Forward P/E figures weren't available for MGM, but it has $12 billion in debt and $885 million in free cash flow.

Wynn's stock price is virtually unchanged from a year ago. Is the forward-looking prognosis for this sector really the same today as back then? Just a few days ago, MGM's mega-project, City Center, announced that over 160,000 applicants swamped their job fair for 12,000 positions. That suggests to me that -- while Vegas may still remain a playground for celebs and the super-rich -- the regular consumer will find it difficult to splurge for a trip to Sin City for the foreseeable future.

Beyond fundamentals and the macro-environment, there's another reason to be wary of investing in these casino stocks: poor governance. Maybe it's not surprising in a town where the high-rollers get the red carpet treatment, but the ultimate red carpet treatment is saved for the executives who run these casinos. Perks abound, rubber-stamped by crony boards. If shareholders don't like it, buy an electrical utility. This is Vegas, baby!

Casino honchos have received some of the sweetheart deals and perks in past years -- all paid for by shareholders. They include:

• Personal use of aircraft. Steve Wynn racked up over $1 million in personal trips last year and both Wynn and Las Vegas Sands lease their aircraft fleet from companies controlled by Wynn and his counter-part Sheldon Adelson.
• Leasing Steve Wynn's personal artwork collection and then picking up the tab for the insurance.
• Valuing a coffee bar within a hotel as worth $3.1 million and then buying Adelson's 50% stake from it.
• Setting up jobs for wives, step-daughters, nieces and nephews with total annual compensation worth as much as $4 million.
• Paying $3 million for security costs related to protecting Adelson and his family (although Adelson chipped in $800,000 to the total bill).
• Help in buying stock near the all-time lows, such as when Adelson's wife bought preferred stock and warrants last November which has since led to paper gains of over $1 billion. Las Vegas Sands' shareholders paid the $500,000 in legal fees she incurred in making this purchase.
• Covering rent and amenities at the Wynn's personal residence for $580,000. Interestingly, a recent third-party analysis of this residence determined that the rent would not be reduced for the coming year, despite "the significant deterioration in the rental market in Las Vegas."
• Personal construction of Las Vegas Sands's SVP Robert Goldstein's house in the amount of $364,000.

Of course, Wynn downplayed his mega-stock sale in August. He explained that he needed the additional "liquidity" in preparation for his upcoming divorce from his wife, Elaine. He was also quick to point out that this sale represented only 10% of his entire holdings. Yet, this is the second time that Elaine (who is also a Wynn director) will divorce. No additional liquidity was needed to fund the first divorce.

The fact that the sale also occurred so close to Wynn's COO dumping shares is also noteworthy and, I don't think, a coincidence. When you comb through these SEC filings and you see the kind of perks these executives sock away for themselves at the expense of shareholders, it's clear that an action like a stock sale doesn't happen with a lot of thought and consideration. It will be interesting to see what other execs at Sands and MGM do in the coming weeks. For now, the stocks are all still near 10-month highs.

What's next for these volatile stocks? If eBay(EBAY Quote) is a gauge -- as discussed in my column last week -- Wynn could be headed for trouble. Its CEO is distracted by personal trips on the corporate jet to the tune of $1 million and a messy divorce. Its COO is also now 61 and presumably starting to think about golfing full-time. It's time to start cashing out.

These firms are minding their own interests -- it's time for shareholders to start minding theirs.

-- Written by Eric Jackson in Naples, Fla.

At the time of publication, Jackson's fund did not have any positions in the companies mentioned.

Eric Jackson is founder and president of Ironfire Capital and the general partner and investment manager of Ironfire Capital US Fund LP and Ironfire Capital International Fund, Ltd.

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TheStreet.com: Activist Investor: Liberty Global's Spinning Wrong Way

From TheStreet.com
By Eric Jackson
10/28/08 - 11:17 AM EDT

About 10 days ago, Liberty Media (LINTA Quote - Cramer on LINTA - Stock Picks) Chairman John Malone sold $18 million worth of stock in Liberty Global (LBTYA Quote - Cramer on LBTYA - Stock Picks), a video and broadband service provider catering to Japan, Europe and Chile. Although Liberty Global's stock price is down 55% in the last month, you should follow his lead and get out now ahead of earnings, which will be announced in early November.

Malone's multiple Liberty-related entities (e.g., Liberty Communications, Liberty Global, Discovery Communications (DISCA Quote - Cramer on DISCA - Stock Picks)) have one thing in common: a love for opaque corporate structures with multiple classes of voting shares. In early 2007, before the words "CDS" and "subprime" had entered our collective lexicon, such complexity mattered little compared with high-growth businesses fueled by acquisitions. Liberty Global complied with this preference and its shares peaked at $44 in July 2007. However, there's been a slow descent since then until this month when the stock has fallen off a cliff. They traded yesterday under $13.

Malone's large stock sales this month are not unique for corporate chiefs these days. Sumner Redstone of Viacom (VIA Quote - Cramer on VIA - Stock Picks) and CBS (CBS Quote - Cramer on CBS - Stock Picks) and Aubrey McClendon of Chesapeake (CHK Quote - Cramer on CHK - Stock Picks) both had to unload large amounts of shares in the face of margin calls a few weeks ago. Malone gave no explanation for his sale, although he presumably faced similar pressures, considering that Liberty Global had spent $1.621 billion repurchasing its shares in the first six months of this year at weighted prices between $34.37 and $35.55.

That cash spent on share repurchases at triple the current market price could come back to harm Liberty Global in the coming quarters, as it only had $1.2 billion in cash at the end of June and just under $20 billion in debt.

Liberty Global is essentially a Comcast (CMCSA Quote - Cramer on CMCSA - Stock Picks)for non-U.S. markets. It delivers video and Internet via broadband instead of traditional cable. It derives no revenue from subscribers in the U.S.; its customers are principally in Japan, Western and Eastern Europe, Chile and Australia. In the first half of 2008, when the notion of emerging markets being decoupled from a flagging U.S. economy was in vogue, such a portfolio would be envious. Now, it appears all these countries are in for a longer recession than the U.S.

Aside from country recession risk, Liberty Global is exposed to currency risk. Virtually all the currencies tied to Liberty Global's customers have weakened significantly between June 30 and Sept. 30. In October, the pace has dramatically increased. Hungary's forint is down 30% this month vs. the dollar, the Chilean peso is down 22.5%, and the Aussie dollar is down 31%. These three countries counted for 16.4% of Liberty Global's total revenue last quarter.

Liberty Global does have extensive derivatives to mitigate this currency fluctuation risk. And some of its debt held in these currencies will surely benefit from the strengthening of the dollar in the past few months. However, the explanations given in the most recent 10-Q make don't make clear the extent to which the company is protected. We will probably have to wait for a more complete explanation during the company's next analysts' call. What is clear is that many companies that believed they were protected from currency risk have experienced deep pain in the last few weeks (such as Citic Pacific's $2 billion loss on a wrong bet against the Aussie dollar).

Liberty Global's assets also include stakes it owns in Sumitomo and News Corp. (NWS Quote - Cramer on NWS - Stock Picks). These investments were worth $682 million at the end of June using fair value accounting. Both companies dropped 25% in the third quarter, and more in October.

When you stack up Liberty Global vs. Comcast, Liberty Global's valuation still appears too rich. Liberty Global's trailing price-to-earnings ratio is 98, with a forward P/E of 26. That is starkly higher than Comcast's trailing P/E of 16.8 and forward P/E of 13. Liberty Global also has a much lower operating margin, return on assets, and return on equity compared to Comcast. Additionally, Liberty Global's debt-to-equity ratio stands at 3.84 vs. 0.81 for Comcast.

We have seen highly levered companies with high P/E ratios -- such as Las Vegas Sands (LVS Quote - Cramer on LVS - Stock Picks) and MGM (MGM Quote - Cramer on MGM - Stock Picks) -- punished in the last few weeks, even though they had both experienced significant sell-offs over the last eight months. (Las Vegas Sands' debt-to-equity ratio is only slightly larger than Liberty Global's.) Liberty Global needs to win back the trust of shareholders by simplifying its corporate structure and fully explaining the extent of its currency exposure in next month's analyst call. Until then, investors should follow John Malone's lead and stay away from Liberty Global.

At the time of publication, Jackson's portfolio was short Liberty Global, CBS and News Corp.
Eric Jackson is founder and president of Ironfire Capital, LLC, and the general partner and investment manager of Ironfire Capital US Fund LP and Ironfire Capital International Fund, Ltd.

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