Wynn stock purchase spurs 13% jump in share price

Steve Wynn spent roughly $63.8 million in an effort to boost the stock price of Wynn Resorts Ltd.

The decision worked, albeit, at least for one day.

Shares of Wynn Resorts jumped more than 13% on the Nasdaq on Wednesday, a day after the company announced its chairman and CEO acquired more than 1 million outstanding shares of the casino company on the open market.

News that Wynn increased his controlling stake to more than 11 million shares after five purchases between Friday and Tuesday spurred the interest of the investment community.

Wynn Resorts closed at $69.91 Wednesday, up $8.11. The company's stock price has on an up and down swing this year, losing almost 60% of its value in the last 12 months.

Deutsche Bank gaming analyst Carlo Santarelli said he expected investors to react positively to Wynn's stock acquisition, which he called "the first meaningful insider purchase and the first sizable open market purchase" by Wynn in a few years.

"Anytime a CEO buys a meaningful stake, it sends a favorable message," Santarelli said.

Wynn operates hotel-casinos on the Strip and Macau.

Much of the stock price volatility has been blamed on Macau, which has seen 18 straight months of gaming revenue declines due to the sinking Chinese economy and a crackdown by the Beijing government on corruption. The anti-graft campaign has ensnared operators of high-end junket businesses who are tasked with bringing big spending customers to private gambling salons at Macau casinos.

Last month, Wynn Resorts said the opening of its $4.1 billion Wynn Palace in Macau had been pushed back until late June because of construction delays.

The company collects more than 65% of its quarterly revenue from its two Macau casinos.

"While Mr. Wynn's purchase will likely be a much needed spark for shares, at least in the short term, we believe it is prudent to be realistic about what the purchase really implies," Santarelli said. "Simply, we believe it is most likely that Mr. Wynn viewed current valuation levels as inexpensive and indicative of unearthed value."