LAS VEGAS--(BUSINESS WIRE)--Prospective investors in the second-class gaming IPO by Red Rock Resorts (NASDAQ: RRR, when listed) are invited to review UNITE HERE’s unauthorized roadshow presentation, including the accompanying presentation notes, on the Red Rock Resorts IPO Dissected website.
“The use of IPO proceeds to fund the $460-million Fertitta Entertainment acquisition should raise red flags for any investors who are considering Red Rock’s second-class shares,” said Ken Liu, an analyst with UNITE HERE. “Red Rock’s IPO takes substantial amount of money out of the company without reducing debt or funding a growth strategy, unlike other public gaming companies.”
UNITE HERE’s critical presentation focused on the expensive, all-cash transaction with insiders at the heart of the second-class IPO as well as data from the Nevada Gaming Control Board showing slow growth in the Las Vegas locals market. The presenters highlighted Red Rock’s lack of concrete growth plans, inside or outside of Las Vegas, and pointed out certain limitations of its tribal gaming management franchise.
Other issues discussed during the presentation included potential overhangs due to the expected sale by Deutsche Bank of its large stake, the lack of a cap on potential future payments under the tax receivable agreement, and corporate governance issues related to the dual-class share structure and long-serving directors.