Shares of Caesar’s Entertainment nearly doubled in the casino operator’s public debut Wednesday and closed up 70%.
Caesar’s, formerly known as Harrah’s Entertainment, sold a little more than 1% of its outstanding shares for $9 apiece late Tuesday. The company raised just $16 million, a minute amount compared to its $22 billion debt burden.
Shares of Caesar’s, which operates resorts mainly in Las Vegas, Atlantic City and New Orleans, began trading Wednesday on Nasdaq under the ticker symbol CZR.
The stock opened at $9.06 a share and quickly rose above $11. It moved as high as $17.90 by early afternoon before retreating to close at $15.39 per share.
Traders said the stock’s pop is likely due to the small size of the offering and shouldn’t be read as an indicator of the health of the broader IPO market.
Still, casino firms have had an auspicious start to the year.
Shares of two of Caesar’s main competitors, Las Vegas Sands, and MGM Resorts, have gained 19% and 33% respectively so far. Wynn Resorts has had a more muted run-up of just 2% in 2012. Shares of all three companies rose roughly 1% Wednesday.
Caesar’s is another relic of 2008’s buyout boom. The casino company was purchased by Apollo Management and TPG Capital in a $31 billion leverage buyout. The private equity firms own 70% of the company under a vehicle called Hamlet Holdings. John Paulson’s hedge fund, Paulson & Co., owns 9.9%.
(Maureen Farrell, CNNMoney)