Steve Wynn allegations punish his company's stock

Ever since the news broke about Steve Wynn, investors have been selling shares of Wynn Resorts.The stock is do...

Posted: Feb 6, 2018 12:40 PM
Updated: Feb 6, 2018 12:40 PM

Ever since the news broke about Steve Wynn, investors have been selling shares of Wynn Resorts.

The stock is down 18% and at least one major institutional investor, Thornburg Investment Management, confirmed to CNN that it sold its entire stake of 891,000 shares on January 26. That was the day a Wall Street Journal article revealed allegations of sexual misconduct by Wynn, its founder and CEO. Wynn has denied the allegations in the Journal story, calling them "preposterous."

Thornburg, which had been the 15th largest institutional investor in the company, wouldn't comment on the sale other than to confirm that the Journal report was "material" to its decision.

Shares in Wynn Resorts have been turning over in a big way. The day the Wall Street Journal report came out, 22 million shares traded -- most of them after the story published. And nearly 26 million shares were traded the following session. Each day had more than 10 times the average trading volume for Wynn Resort shares. And even though the shares haven't moved as much since the plunge those first two days, trading volume has remained elevated.

Institutional investors owned the overwhelming majority of the shares -- about 74% -- as of the end of September, the most recent figures available. In addition, 22% of Wynn shares are held by company insiders, such as Wynn himself, who owns nearly 12% of the company.

Insiders like top executives or board members need to file with the SEC within days after they buy or sell shares, and none have done so since the news broke about Thornburgh's sale.

Individual investors who aren't insiders hold only about 4% of the shares.

Related: Steve Wynn remade Vegas, but China is where he makes the real money

So for the stock to lose nearly 18% of its value in just a few days, institutional investors must have been selling heavily. Details of those sales won't be public until firms disclose their holdings in filings in the coming weeks. Unlike company insiders, institutional investors generally only have to disclose their sales quarterly unless they hold 5% or more of a company.

Of course for everyone selling shares, there is someone else buying, trying to take advantage of the cheaper price. BlackRock boosted its Wynn stake by about 243,000 shares, increasing its total stake from 4.8% to 5% of the company, according to a filing Thursday. The company said it does not comment on specific investments.

Even with all the allegations of sexual harassment and misconduct that have become public in recent months, the Wynn case is the first in which the CEO of a major publicly traded company has been accused of misdeeds.

"This is uncharted territory," said Dan Wasiolek, an analyst with Morningstar.

Wynn Resorts is included in the S&P 500 so is held by funds that track the popular index. Those funds typically would only sell its Wynn holdings if Wynn Resorts were dropped from the S&P 500.

Vanguard is Wynn's largest institutional shareholder, with 8.2 million shares held mostly in index funds. "We won't divest from a company unless it falls out of the underlying benchmark," said Vanguard spokesman Freddy Martino, but he declined to comment specifically about Wynn.

The two biggest shareholders in the company are Steve Wynn himself and his ex-wife Elaine, whom he has been battling in court. Elaine Wynn owns 9% of Wynn Resorts stock, but probably can't sell it due to restrictions set in their divorce settlement.

Steve Wynn hasn't sold a single share of his stake, according to company filings. That has cost him dearly -- almost $440 million since the day before the Journal story detailed the allegations against him.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 657037

Reported Deaths: 12450
CountyCasesDeaths
Marion901321624
Lake48105871
Allen35552632
Hamilton31839393
St. Joseph29538510
Elkhart25261412
Vanderburgh21115377
Tippecanoe19765197
Johnson16242352
Porter15838267
Hendricks15723296
Clark11843179
Madison11672314
Vigo11503228
Monroe10248158
Delaware9788178
LaPorte9720194
Howard9017194
Kosciusko8514107
Bartholomew7373147
Warrick7369146
Hancock7362128
Floyd7139164
Wayne6586188
Grant6395157
Morgan6040124
Boone603388
Dubois5868111
Dearborn540266
Henry539492
Marshall5390104
Cass537199
Noble506775
Jackson462063
Shelby458490
Lawrence4154111
Gibson399681
Harrison395160
Clinton392353
DeKalb382078
Montgomery381583
Knox354484
Miami354063
Whitley346235
Huntington338176
Steuben335955
Wabash328775
Putnam325959
Ripley325161
Adams320249
Jasper312943
White295351
Jefferson292770
Daviess284296
Fayette270255
Decatur269388
Greene259978
Posey259731
Wells255374
Scott248446
LaGrange240170
Clay238944
Randolph225076
Spencer215830
Jennings213544
Washington207727
Sullivan202038
Fountain200341
Starke185950
Owen181652
Jay177328
Fulton176437
Carroll175618
Perry172435
Orange170450
Rush163922
Franklin158335
Vermillion158040
Tipton145441
Parke137915
Pike127232
Blackford120027
Pulaski105643
Newton96431
Brown94639
Benton91113
Crawford90113
Martin80114
Switzerland7507
Warren74612
Union66810
Ohio52711
Unassigned0425

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 958153

Reported Deaths: 16968
CountyCasesDeaths
Franklin1109381191
Cuyahoga944201702
Hamilton72486944
Montgomery46927869
Summit39637941
Butler35004461
Lucas34724755
Stark29011826
Warren22137269
Lorain21738385
Mahoning19251533
Lake18178300
Clermont18172206
Delaware16261128
Licking14820194
Fairfield14378157
Trumbull14136454
Greene13470209
Medina13188218
Clark12121332
Wood11384193
Portage10829152
Allen10710231
Richland10165198
Miami9937179
Columbiana8049179
Muskingum8036123
Tuscarawas7974233
Pickaway795898
Marion7936134
Wayne7791216
Erie6783181
Ross6065135
Geauga5978129
Hancock5941110
Scioto5867105
Ashtabula5811140
Lawrence519073
Union505052
Darke5006122
Belmont484787
Sandusky472393
Jefferson4709107
Huron4701116
Seneca4620103
Athens456231
Mercer4559101
Auglaize453896
Washington451286
Shelby438867
Knox397884
Putnam3964101
Madison388747
Ashland374594
Fulton374364
Defiance3670101
Brown366742
Crawford354296
Preble350570
Logan349757
Clinton336162
Highland323652
Ottawa318467
Williams299578
Jackson287056
Guernsey283234
Champaign282545
Fayette265642
Perry265239
Morrow256624
Henry242665
Hardin241856
Holmes2416104
Coshocton230246
Van Wert227749
Gallia219446
Adams213732
Pike212025
Wyandot207652
Hocking192148
Carroll178828
Paulding158423
Meigs133536
Noble127842
Monroe114936
Harrison99132
Morgan98834
Vinton76215
Unassigned00
Fort Wayne
Clear
33° wxIcon
Hi: 48° Lo: 32°
Feels Like: 28°
Angola
Clear
30° wxIcon
Hi: 47° Lo: 29°
Feels Like: 25°
Huntington
Partly Cloudy
31° wxIcon
Hi: 47° Lo: 31°
Feels Like: 26°
Fort Wayne
Clear
33° wxIcon
Hi: 47° Lo: 32°
Feels Like: 28°
Lima
Partly Cloudy
35° wxIcon
Hi: 48° Lo: 33°
Feels Like: 27°
Cooler Thursday, More Warmth Friday
WFFT Radar
WFFT Temperatures
WFFT National

Community Events