Shares of Wynn Resorts Ltd. slid another 3.5% in premarket trade Monday, as investors continued to digest a Wall Street Journal report from Friday alleging yearslong sexual misconduct by Chief Executive Steve Wynn. The move sent Wynn shares down about 10% Friday and shaved about $2 billion off Wynn Resorts market capitalization. Wynn, who stepped down from his rolse finance chairman for the Republican National Convention over the weekend, denied the allegations, telling the paper: “The idea that I ever assaulted any woman is preposterous.” “We think the news reports alleging sexual harassment by Steve Wynn creates a sizable overhang in the shares and see value that compensates investors for risk related to these allegations at the ~$150 level, versus the ~$180 level it last traded on Friday,” J.P. Morgan analysts wrote in a note. Analysts noted that the gaming industry is highly regulated and licenses include character clauses. Nevada and Massachusetts gaming commissions have already launched reviews. “A scenario where WYNN doesn’t have Steve as a CEO is not good for the company,” said the note. “We have always held the belief that WYNN possesses the single largest individual CEO dependency versus any of the other 30 gaming and lodging companies our coverage universe (well, maybe LVS with CEO Sheldon Adelson is tie with WYNN).” Shares have gained 75% in the last 12 months, while the S&P 500 has gained 25%.
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