Feb 7 (Reuters) - Matt Maddox taking the reins at Wynn Resorts Ltd could help the casino operator win back some investor confidence, after shares were hammered following reports of sexual misconduct allegations against Steve Wynn broke over a week ago.
Wynn, 76, who resigned as CEO on Tuesday, has denied the allegations. Analysts have applauded the decision to move a veteran of the company to the top post.
Wynn’s shares fell briefly in premarket trading on Wednesday, but then rose 5.5 percent. The company has lost nearly a fifth of its value since Jan. 26 when reports of the allegations first surfaced.
Up to Jan. 26, Wynn’s shares had risen more than 15-fold since its initial public offering in 2002.
“We believe it is important to highlight the strong, tenured management team Mr. Wynn leaves behind,” Morgan Stanley analyst Praveen Choudhary said in a note.
Maddox, 42, has been with the company since it was founded 16 years ago and was named president in 2013. He has taken an increasingly active role in investor conference calls and discussions over business operations.
“WYNN continues to have operational presidents in both Las Vegas (Maurice Wooden) and Macau (Ian Coughlan), with Linda Chen president of marketing, and John Littell president of design and development,” Choudhary noted.
Maddox moved to the Chinese-controlled territory of Macau soon after Wynn Resorts secured its concession there. Wynn Macau currently operates two lavish casinos in the casino hub and the business accounts for more than 70 percent of Wynn Resorts’ revenue.
Still, Maddox has big shoes to fill.
Wynn, who owns a roughly 12 percent stake in the company, started in Las Vegas casinos in the 1960s, creating some of Las Vegas’ most iconic landmarks – the Mirage, Bellagio and Treasure Island.
But he was forced to sell his multi-billion dollar operation Mirage Resorts to tycoon Kirk Kerkorian in a hostile takeover in 2000. Kerkorian then created MGM Mirage and Wynn went on to create Wynn Resorts in 2002.
“Wynn’s value to the company is unarguably profound as its chief visionary and diplomat,” Jefferies analyst David Katz said in a note.
“We do not believe the company can grow at the same trajectory nor can it maintain its cutting edge position.” (Reporting by Rachit Vats and Ankit Ajmera in Bengaluru and Farah Master in Hong Kong; Editing by Sayantani Ghosh)