By George Matlock, editor, eltonjohnworld
News last year that Elton was to play at Caesars Palace may have done nothing to lift Caesars Entertainment Inc. shares, but the company enjoyed a doubling in profits, according to its latest earnings report on April 22, 2004. And Elton appears to have been partly to thank for an overall lift to shares since he came on board.
As reported a week ago by the business press, profit at Caesars Entertainment Inc. rose 93 percent in the first quarter as the company, alongside its major casino competitors reporting earnings this month. The industry benefited from the improving U.S. economy and stronger gambling trends in Las Vegas, Nevada.
The company reported profit of $79 million compared with $41 million in the same quarter of last year, helped by record first-quarter results at its flagship Caesars Palace hotel-casino in Las Vegas.
To illustrate “the Elton factor”, take a look at the performance of the share price and that of a Wall Street index like the S&P500. By all reckoning, Caesar’s share price has outperformed the wider index.
Rumours of Elton’s appearance surfaced around August 31, 2003. When the news was confirmed of his appearance on October 21, Caesars’ share price dipped for the next few days!
But as markets are in the business of anticipating trends or events, rather than reacting to them unless they shock, that is understandable market behaviour.
On August 29, just ahead of the first signs of Elton’s slew of shows at Caesars Palace, the company share price was at an intraday low of $8.66. By April 21, 2004, the day before the company announced its quarterly results, the share price was up around 65 percent. That compares with the S&P500 index rising by a more modest 13 percent.
Elton’s first gig at Caesars was on the night of February 13. Between then and April 21, the share price, starting at $12, “rocketed” by a further 19 percent. And the S&P500? Well, it’s a fairly good proxy for other indices on Wall Street. And the S&P fell 2.3 percent.
Elton may not be a licence to print money for Caesars investors, but he certainly has added to the bottom line and the share price!