Las Vegas Sands plunges below $8 on loan default concerns, down 94% from Oct 2007

This article belongs to the Singapore recession watch story arc.

bloomberg.com :

Las Vegas Sands plunged in New York trading after saying it may be in default of some loans if it can't raise capital, threatening its ability to keep operating "as a going concern," the casino company said in a regulatory filing today [6 Nov 2008]. Las Vegas Sands dropped below $8 on the NYSE, down over 94% from a high of $145.57 in Oct 2007. The filing sparked new concerns that casino cash flow is dwindling just as Las Vegas Sands undertakes its biggest expansion. The owner of the Venetian and Palazzo casino resorts on the Las Vegas Strip, where gambling revenue has fallen for 8 straight months, is building almost $17 billion worth of resorts in Singapore, China's Macau and Bethlehem, Pennsylvania.

- Now, weren't the casinos, euphemistically named IR's (integrated resorts), going to save the Singapore economy, together with the Formula 1 races? The 2 casinos were supposed to create 10,000 jobs each. And require over 50MW of electrical power apiece to boot. It would have been a worthwhile effort, even including the fossil fuel yet to be burnt, and it might just have been a helpful thing for a faltering economy heading deeper in recession, if execution were to go through flawlessly. But now it seems that the execution of all these plans seems to be in some doubt, as the value of the Las Vegas Sands shares has dropped over 94% from its Oct 2007 highs, and down over 30% in today's [6 Nov 2008] trading session alone.

Once again, the peakoiler community has proven amazingly prescient in its forecasting ability. One of the central points of discussion over the years has been about the fate of cities such as Las Vegas in an era of peak oil and general economic decline. We all said at the time, and we are still saying it now, that Las Vegas, together with its associated gambling companies, is toast. The latest thread on this subject is titled "Sin City is in trouble", and you can read it all for yourself.

I am watching Las Vegas Sands [LVS] shares collapse in real time on its Google Finance page with a mixture of frustration, shock, and a heavy dose of "we told you so". And thinking of another favourite phrase from our community : "we haven't seen anything yet." It's a race to the bottom that nobody wins. What can the government do? What can anyone do?

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