Park West Asset Management LLC, a California-based hedge fund founded by Peter S. Park, has filed a 13G form with the SEC regarding its share ownership of Eldorado Resorts Inc. (NASDAQ:ERI). The investment management firm has disclosed a 5.2% ownership stake in the company of nearly 2.43 million shares. This marks an increase of 2.19 million shares since the fund’s most recent 13F filing.
Park West Asset Management is an employee-owned hedge fund established by Peter S. Park in November 2002. The California-based firm employs a long/short, event-driven and credit/high yield investing approach in managing its capital and focuses on public equity and fixed income markets. Park West Asset Management provides its services to foundations, high-net-worth individuals, institutional investors, and financially complex individuals, among other individuals and entities. Peter S. Park oversees $1.8 billion in assets under management, which subsequently classifies his fund in the category of large investment firms. The fund’s most recent 13F filing reveals that Park West Asset Management manages a public equity portfolio worth $686.04 million, while the value of its positions represent 37% of the fund’s regulatory assets under management. The same filing discloses that the firm’s holdings are diversified among the following sectors: 25.37% in the services sector, 11.93% in the technology sector, and 11.92% and 11.06% in the healthcare and consumer cyclical sectors, respectively.
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Eldorado Resorts Inc. (NASDAQ:ERI) is a casino entertainment company that currently owns and operates six properties in five different states, including the Eldorado Resort Casino and the Silver Legacy Casino in Reno, NV; the Eldorado Resort Casino in Shreveport, LA; the Scioto Downs Cacino in Columbus, OH; the Mountaineer Casino Racetrack & Resort in Chester, WV; and the Presque Isle Downs & Casino in Erie, PA. The shares of Eldorado have been riding a long-lasting uptrend this year, achieving a gain of 118% year-to-date. However, there is more room to run for the stock as the company has continued to report good news in recent days.
On July 7, Eldorado Resorts announced the acquisition of MGM Resorts International (NYSE:MGM)’s 50% interest in the Silver Legacy Resort Casino Reno, along with all the assets of Circus Circus Reno for $72.5 million. In addition to that, Eldorado expects to repay amounts outstanding under the Silver Legacy credit facility, with $60 million outstanding as of March 31, 2015. The CEO of the company, Gary Carano, claimed that this acquisition is expected to add value to the company’s operating results and strengthen its position in the increasingly attractive Reno gaming market. Just recently, Eldorado Resorts priced an offering of $375 million in aggregate principal amount of senior notes due 2023 at an interest rate of 7% per annum and announced its plans of selling shares of common stock to raise approximately $60 million in net proceeds, which will allow the company to pay the aforementioned purchase from MGM Resorts International, as well as refinance some of its debt. It is worth pointing out that Eldorado Resorts has been actively attempting to expand its operations and strengthen its financial position. The company’s debt refinancing activities will definitely free up money to fund further expansion and acquisitions, while the freshly-completed acquisition will boost the company’s revenues.
Now that we know what Eldorado Resorts’ moves have been so far, let’s take a look at the primary financial figures in the company’s financial report for the first quarter of 2015. The company reported total net revenue of $167.45 million in the first quarter of 2015, compared to a figure of $171.86 million reported in the same quarter a year ago. At the same time, the total adjusted EBITDA for the quarter amounted to $27.72 million, lower by 2.5% year-over-year. Moreover, the company reported a diluted loss per share of $0.13 for the first quarter of the current year, compared to a diluted loss per share of $0.10 reported a year ago. Despite the seemingly unsatisfactory results, the management of Eldorado has claimed that the company made good progress in the first quarter of 2015 with its property enhancement strategy, which is expected to deliver quite attractive returns in the upcoming quarters. Paul Reeder and Edward Shapiro’s PAR Capital Management is the largest investor in Eldorado Resorts Inc. (NASDAQ:ERI), with 3.80 million shares.
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