Will Wynn Resorts be able to survive following the dramatic resignation of its chief architect and namesake, Steve Wynn? Global investment firms hurried to offer their opinions on the future of this $18 billion casino, entertainment and hotel conglomerate after the 76 year old billionaire handed in his papers at a board meeting last week. A few say that the outlook is grim since Wynn Resorts is nothing without the name behind its founder and if the captain dies, the ship sinks with him.
However, some seem to think that Wynn Resorts could come out for the better after Wynn’s resignation, which came after a month long controversy surrounding accusations made by an in-depth Wall Street Journal investigation article, that the executive harassed female employees for literally decades.
Wynn claimed that it due to an “avalanche of negative publicity” which was wreaking havoc to the company, that he was stepping down. The half-finished $2.4 billion casino in Boston is just one of properties that stand to be affected by plummeting share prices, pending lawsuits by shareholders and the threat of investigations by authorities. All these could have become a reality if Wynn had remained on.
Wynn, for the record, has not once admitted any wrongdoing and has called the claims “preposterous”.
Upon his resignation, global investor firm, Jefferies issued a note saying: “Elvis has left the building. Mr. Wynn’s value to the company is unarguably profound as its chief visionary and diplomat. As such, we do not believe the company can grow at the same trajectory nor can it maintain its cutting edge position.”
The investigations against Wynn had far-reaching consequences that went beyond the gambling world. He also resigned as finance chairman of the Republican National Committee, and a number of universities removed his name from buildings and programs.
After Wynn’s resignation, share prices jumped 8.6%, however later in the week, the Massachusetts Gaming Commission said that it would continue its investigation against Wynn and the company. It was pointed out that Wynn still holds shares in the company and wields significant power in Wynn Resorts’ corporate decisions.
Referring to a reported $7.5 million that Wynn reached with a manicurist following sexual harassment charges, the chairman of the Massachusetts authority, David Crosby said: “A central question is, what did the board of directors and staff know, and when did they know it, about the settlement and the associated allegations? That’s a critical point for us and for the public of Massachusetts to know ASAP.”
If the Massachusetts authorities decide to remove Wynn Resorts’ rights to the lone license to build a Boston casino, this could have a powerful detrimental affect on the group. It is believed that other state authorities will follow their lead and the company could face a tough battle to fix the damage.
In the meantime, Wynn Resorts’ long-time president, Matt Maddox has been named as Wynn’s replacement.
