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Howard Stutz

Announced departure of Sands CFO doesn't faze Wall Street

1 July 2013

LAS VEGAS -- The announced departure of Las Vegas Sands Corp.’s chief financial officer hasn’t concerned Wall Street.

The stock price is up and analysts passed off Tuesday’s announcement that CFO Kenneth Kay was leaving the casino operator on July 31 as “just another negative headline.”

A source familiar with the situation said Kay, who had been CFO since 2008, was “let go” by Las Vegas Sands but not for any cause.

RBC Capital Markets gaming analyst John Kempf told investors not to read too much into the departure, which comes as the company faces investigations by the Securities and Exchange Commission and the U.S. Department of Justice over potential violations of the Foreign Corrupt Practices Act.

“We view this event as another in a long line of ‘distractions’ that have the impact of tainting the positive fundamentals in the eyes of some investors,” Kempf said in a research note.

On Wall Street, shares of Las Vegas Sands, traded on the New York Stock Exchange, climbed 67 cents on Wednesday, $1.50 on Thursday, and 5 cents on Friday to close the week at $52.93.

Analysts said investors are more focused on Las Vegas Sands’ continued prospects in Macau, where the company operates four resorts, is finishing the next phase of the $4.4 billion Sands Cotai Central, and is developing a Paris-themed hotel-casino project.

Almost 80 percent of the company’s $11.13 billion in revenues came from Macau and the Marina Bay Sands in Singapore.

Kempf said he talked with Las Vegas Sands management about Kay’s departure. He told investors the move had nothing to do with the investigations or the company’s cutting ties in April with PricewaterhouseCoopers LLC, its outside auditor since 2004. Las Vegas Sands appointed Deloitte & Touche LLP to the position.

“The company did not provide a reason for Mr. Kay’s departure but we would note his original employment contract, which was entered into in December 2008, expired on December 2011 and was subject to automatic renewals for terms of one year each, with options for both the company and Mr. Kay to not extend the term,” Kempf said.

According to an SEC filing, Kay entered into “a six-month consultancy agreement” with the company to provide transitional services as needed.

“The company will undertake a search for Mr. Kay’s permanent replacement,” Las Vegas Sands said.

Meanwhile, analysts said investors have paid little concern to company Chairman Sheldon Adelson’s recent tirade against Internet gaming legalization. He urged state and federal lawmakers to ban Internet gaming in a commentary published on

He repeated the same points in a website,, which is paid for by Las Vegas Sands Corp.

Macquarie Securities gaming analyst Chad Beynon told investors last week the company’s Macau holdings will continue to flourish. The market produced $38 billion in gaming revenues in 2012 and is 14 percent through May.

Beynon said the company “is the only operator that will have additional gaming and hotel capacity over the next two years in Macau. Las Vegas Sands generates more annual cash flow than any other Macau concessionaire.”