What are Carl Icahn’s intentions after latest Caesars stock purchase?

Billionaire investor Carl Icahn has not lost his fascination with Caesars Entertainment.

Bloomberg News reported last week that Icahn — who made millions by selling his company stock four years ago after helping increase its value — has acquired an undisclosed stake in the gaming company, which operates 52 casinos and resorts in 18 states including 15 properties in Nevada. The story caused the company’s stock price to increase more than 15 percent and led to speculation over his intentions.

“I like Caesars and I own some stock, I would never do activism in Caesars," Icahn told CNBC after the news broke.

Icahn, 88, whose net worth is $5.4 billion according to Forbes, doesn’t do things quietly.

His activism in Caesars, starting in 2018, led to his control of 25 percent of the company’s shares. He oversaw a corporate management shake-up, the appointment of three of his associates to the company’s board and the eventual sale of Caesars to the much smaller Eldorado Resorts for $17.3 billion.

After the deal was finalized, Icahn cashed out. His associates left the board and Eldorado Resorts became Caesars Entertainment, controlled by the Carano family with Eldorado CEO Tom Reeg moving into the same position.

So what does this latest move by Icahn mean?

Caesars has not commented nor acknowledged the Icahn investment in a Securities and Exchange Commission filing, which is required if the acquisition represents 5 percent or more of the outstanding shares.

Bank of America gaming analyst Shaun Kelley suggested the investment was an endorsement by Icahn of Caesars' current direction and management.

At the end of April, Caesars reported a 1 percent decline in revenue during the first quarter and a 10 percent decline in cash flow, but the investment community didn’t appear overly concerned.

The company touted its two new temporary casinos in Virginia and Nebraska, a renovation of its Caesars New Orleans resort and its focus on digital gaming, which saw revenue jump 19 percent from the prior year.

“We feel good about where we’re sitting [and] what the rest of the year looks like,” Reeg said on a conference call.

Icahn has long retained an active interest in Las Vegas and the gaming industry — primarily with distressed properties.

In 2008, he made a $1 billion profit when he sold the Stratosphere, both Arizona Charlie's and the Aquarius in Laughlin to a private equity firm for $1.3 billion. Two years later, he became the largest shareholder in the former Tropicana Entertainment when the business emerged from bankruptcy. Icahn’s company eventually sold the nine casinos in five states to different parties.

Icahn acquired the Fontainebleau Las Vegas out of bankruptcy in 2010 for $150 million. The Strip property was 70 percent complete, but Icahn held on to the unfinished resort for seven years, selling off furnishings, other interior items and a construction crane at the top of the building.

He sold the property in 2017 to New York developer Steven Witkoff for $600 million, netting a $450 million profit as his distressed property strategy paid off. The Fontainebleau was eventually completed by its original developer, Jeffrey Soffer, and opened in December.

This story was published June 5 by The Nevada Independent and is republished here with permission.