COVID Concerns Send Casino Stocks Tumbling As Recovery Dims

COVID Concerns Send Casino Stocks Tumbling As Recovery Dims

Tyler Durden

Mon, 07/06/2020 – 20:40

As the recovery stalls, states are pausing and or reversing reopenings as coronavirus cases surge. Mobility trends show retail and or corporate workspace activity slowed in late June, sparking new concerns the casino recovery could be coming to an end. 

The S&P500 Casino and Gaming (Sub Ind) is down 1% in late afternoon trading on Monday. From mid-March to June 8, the casino index soared 133% on reopening optimism. Since June 9, the index has fallen 24% on technical exhaustion, coupled with rising virus cases across the country that could threaten recent reopenings of US casinos. 

Notable declines MGM Resorts International (-2%), Wynn Resorts Ltd (-2%), Penn National Gaming (-4.1%), Golden Entertainment (-4.4%), Caesars Entertainment (-1.5%), and Boyd Gaming (-3.8%). 

You’re never going to guess who panic bought casino stocks with their Trump checks and unemployment benefits –  Robinhood traders, of course. Notice at the start of the pandemic, the number of Robinhood users holding MGM shares went from 7,800 to over 200,000 by early July.

Robinhood traders also panic bought Barstool Sports’ Dave Portnoy’s PENN during the pandemic. 

Americans are quickly losing interest in casinos. No proven vaccine = no hanging out in indoor commercial spaces. 

Don’t tell Robinhood daytraders, who panic bought not just casinos, but also airlines, cruise ships, and rental car companies – that a V-shaped recovery in the real economy won’t happen this year. 

Former Chief Economist at the World Bank Paul Romer shocked a Fox Bussiness host Monday when he said a recovery in economic growth and jobs reverting to 2019 levels could take until 2028. 

Millennials who panic bought virus-sensitive stocks could find out in the coming months/quarters what it means to be a bagholder.   

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Author: Tyler Durden

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