Sexual misconduct news has recently taken center stage in the US, particularly with the allegations set before (former) film and media mogul Harvey Weinstein and America’s (former) favorite ‘dad’ Bill Cosby. Today, a lot of women are coming forward, and the ‘Me Too’ movement is gaining a lot of traction as well. But there’s another sexual misconduct scandal which has become quite a sensation, albeit to a lesser degree: the allegations of rape, harassment, and sexual misconduct against another mogul in the casino industry – Steve Wynn, the former Chief Executive Officer of no less than Wynn Resorts. According to yet another accuser, Steve Wynn was responsible for raping her and getting her pregnant. Although this was supposedly way back in the 1970s, the story has become even more relevant today.
The disturbing details
The problem is that it isn’t just one woman who has accused Steve Wynn of rape and sexual misconduct – multiple women reported being raped, and this woman from Chicago is just the latest in the list of accusers. According to the woman, Steve Wynn made her pregnant in the 1970s and she then had to give birth to his child in nothing but a restroom in a service station after he abused and raped her on numerous occasions at her own apartment.
As mentioned, there are other accusers. Another woman, who worked at the Golden Nugget as a dealer in 1975, informed the police department in Las Vegas that she consented to havesex with him a few times, but it was only because she felt obligated to do it, being his employee. After one year, she stated that Steve Wynn approached her again for sex, but she refused and was shortly accused of stealing casino money (which only amounted to $40) and she then had no other choice but to resign.
For his own part, Steve Wynn has vehemently denied any wrongdoing, although the statute of limitations makes it unlikely for him to ever be arrested and charged.
How this has all affected Wynn Resorts’ stocks
There is no doubt that Steve Wynn is down on his luck these days, and unfortunately, his own company’s stocks have been affected as well. Since the news came out, investors in Wynn Resorts have been getting rid of their stocks, and the stock price of the company, as of mid-February, went down by as much as 18%. One major Wynn Resorts investor, Thornburg Investment Management, actually told CNN that it chose to sell its whole stake of shares with Wynn Resorts amounting to 891,000 Wynn Resorts shares at the end of January.
Other shares when it comes to Wynn Resorts have become increasingly volatile as well. On the day the report about Steve Wynn came out on the Wall Street Journal, 22 million Wynn Resorts shares were traded – and what’s notable about this is that these shares were traded only after the WSJ story was released. In the next session, another 26 million Wynn Resorts shares were traded again. Simply put, each day following the news had over 10x the normal or standard trading volume for shares of the company. Although share trading has not fluctuated as much since the first few days of the news report, the trading volume is still higher than the average.
Many institutional investors such as the above-mentioned Thornburg Investment Management own the majority of Wynn Resorts shares, amounting to about 74%. And while 74% is owned by institutional investors, about 22% is owned by company insiders (like Wynn, who owns about 12% of Wynn Resorts), and about 4% of shares of the company is owned by individual or personal investors.
It is also known that insiders such as board members and the company’s top executives are supposed to file with the Securities and Exchange Commission (SEC) days after buying or selling company shares, but none of the insiders have done this since the newscame out about the sale of Thornburg Investment Management’s shares.
What’s in store for Steve Wynn and Wynn Resorts?
In conclusion, since Wynn Resorts shareshave fallen by as much as 18% in the first few days since the news about Steve Wynn came out, this means that institutional investors have been doing a lot of selling. But the details regarding those share sales will only be released to the public when the companies divulge their shareholdings in their filings. Compared to the Wynn Resorts insiders who have to file their share buying or selling, institutional investors don’t have to divulge their quarterly sales unless they are holding 5% of a company’s shares.
As a matter of fact, the two largest company shareholders are Steve Wynn along with Elaine, his ex-wife, whom Steve Wynn has also been fighting in court. Elaine owns about 9% of the company’s stocks, although she may not be able to sell it because of divorce arrangement restrictions.
But for those who are selling, there are also those who are buying and trying to gain from the less expensive share prices. Institutional investors like BlackRock increased its Wynn Resorts shares to 243,000, with a now total stake of 5% of Wynn Resorts.
What makes the situation more interesting is the fact that even with the many sexual misconduct allegations which have surfaced over the past few months, the Steve Wynn situation is the first case which deals with the Chief Executive Officer of a major company which is also publicly traded.
Since the beginning of the sexual misconduct and rape scandal, no stocks have been sold by Steve Wynn – and this essentially means that he has lost nearly $440 million from the day the story in the Wall Street Journal effectively sealed his fate in the professional world.
