Keith shorted CZR in the Hedgeye Virtual Portfolio at $13.89. According to his model, the TRADE range is between $11.89 and $13.97.
CZR shares have been extremely volatile as investors and analysts try to determine fair value. In our view, outside of an option on internet gaming, CZR's core casino operations provide zero value given its huge debt burden of >$22 billion.
Better regional gaming performance and a recovery in Vegas still do not justify any equity value. Investors may be playing roulette with the internet gaming option. A federally legislated US online poker market is no sure thing and even if it does occur, investors may be too optimistic on expectations for timing.