Great Canadian Gaming Corp. T.GC

RE:Keep the LT view

[maypeters]

Not very hard to shake out the weak hands (unfortunately) for the shorters. The stock is not for the faint of heart and not for those who are not able to hold one for long time. The shorts did that before - worked - doing it again. Very nicely co-ordinated effort though this time - no short article - just negative articles popping up in the media. The business channel we have does their part same as last time - went to great lengths to promote the fall in profit was because of the table revenue decline in BC (12%). The host kept repeating it and the second media article was very well promoted. 

As horses said - there will be growing pains. The company is getting transformed. Used to be stable revenue - everything as is - most of the operations in BC. Now much more larger scale - operational risk always comes into the picture when you  are talking about a spend of $1.5B on GTA bundle and $360M on GTA West bundle.

They did successfully implement the contruction of the new casinos in Peterborough and Beleville and will be cash flow positive from there as most of the contstruction costs was paid through ongoing cash flow. 

The folks in the media kept on repeating that profit was lower due to lower margins. The lower margins as Rod has repeated on the CC will be because of change of mix in the gaming - table games always have higher expense and lower margin due to the payment to dealers and supervisors (vs slots) and second will be when non-gaming revenue will increase (almost non-existent right now in Ontario) but this will increase profit and will also increase gaming revenue as it does get the crowds in (hotel / restaurants / bars / concerts). Just part of the business. 

If you look at Vegas (not a very fair comparison - but only 30% of the revenue is now from gaming). They have to transform themselves as people can now gamble in their backyard. 

The stock has already become cheap again - move up - and maybe get taken down again. Is it fair ? Is this investing ? Probably not - but then again the markets in the short term can and have been manipulated and GC even more so. Long term the manipulation will not hold out. 

It was not a fantastic Q by any stretch of imagination but was it worthy of a 25% drop ? The drop of course started the week before and so did the hit articles. 

The whole takendown did remind me of the scene in the movie Wall Street "Blue Horseshoe loves Anacott Steel"  (only thing is GC got taken down instead of up but it was in play)

Management is good at what they do and have good partners. If they execute well at their end the stock price will reflect the true potential in time. Maybe a dead investment (and a losing one) for a while but that is the risk and price we all pay one time or the other. 

GLTA

ROE888Mark wrote: This dip in price will shake out the weaker hands. The stronger hands will hold or add. I remain confident that my capital is safe and that GC will prove to one of my better investments. 
The shorts have maintained that GC/Brookfield overpaid OLG for the deal, thus crimping potential profitability,  but I trust our company mgt. in their projections. We have lots of ‘multiplier free spins’ coming!!!