Union takes aim at Fertitta brothers’ stock IPO

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Wild

Zi Nazi
Admin
Dec 31, 2014
85,008
123,340


On Jan. 14th, Red Rock Resorts Inc., the casino company controlled by UFC co-owners Frank and Lorenzo Fertitta and formerly known as Station Casinos, filed an amended S-1 with the SEC to go public. As Bloody Elbow previously reported, the net proceeds of the offering will not finance growth or business development activities, but will go to key corporate insiders and their family members, including $112.5 million to each of the Fertitta brothers and $53 million to trusts for their six children.

It's unusual for an IPO to be a pure cash event for key insiders and the Fertittas' detractors have taken notice. UNITE HERE, the parent organization of Culinary Workers Union Local 226 in Las Vegas, started a website called Red Rock Resorts / Station Casinos IPO Dissected which contains warnings such as "Outside Investors Should Demand a Cap on Cash Payments to Insiders," "Selling Growth While Cashing Out," and "Do You Want to Be a Second-Class Shareholder of Red Rock Resorts?"

Some of these warnings made it yesterday to the investing website Seeking Alpha whereClark Schultz wrote:

Warning issued on Red Rock Resorts IPO

The Red Rock Resorts (Pending: RRR) IPO is the target of unions and Deutsche Bank watchers who maintain that insiders will cash out at a high price.

The groups warn that IPO funds aren't being targeted to fund growth and new development or reduce debt levels.

With the Culinary Union previously maintaining a UFC = Unfit for Children website and still maintaining Zuffa Investors Alert, these warnings may need to be taken with a grain of salt, but the investing community is clearly aware.

The IPO was postponed on Jan. 28th due to recent market conditions but Red Rock has already filed another, similar amended S-1 with the SEC.

LINK: UNITE HERE has ‘various issues’ with Frank and Lorenzo Fertitta’s Red Rock Resorts IPO
 

kneeblock

Drapetomaniac
Apr 18, 2015
12,435
23,026
Red Rock/Station was underwater for years and still isn't fully recovered, yet they use an IPO to set up trusts for the kids?

This is the business sense the UFC ownership has and why they are not the wunderkinds they have often been celebrated as by fawning MMA and financial media. As the Culinary Union and the fighters have often contended, the money is there to compensate workers better in their ventures. They just choose to keep it all for themselves.
 

Haulport

Quis Custodiet Ipsos Custodes
First 100
Jan 17, 2015
3,062
4,165
Anyone who purchases or underwrites this stock is a moron or a criminal (in the case of the underwriters). This is the kind of penny stock move the Mob was involved in for years and may fuck them up good regardless of the fact that it is a legit business. Some creeps will underwrite it, some boiler rooms will push the shit stock hard to lift price in the short term, the Fertittas will sell shares, stock will collapse and the SEC will investigate them...
 

Ryann Von Doom

The Man
Jan 28, 2015
5,896
6,676
Red Rock/Station was underwater for years and still isn't fully recovered, yet they use an IPO to set up trusts for the kids?

This is the business sense the UFC ownership has and why they are not the wunderkinds they have often been celebrated as by fawning MMA and financial media. As the Culinary Union and the fighters have often contended, the money is there to compensate workers better in their ventures. They just choose to keep it all for themselves.
That's strange, everytime I was by that casino the parking lot was full.