February 5, 2018
Wynn loses hundreds of millions
For some time now, Wynn Resorts founder and CEO, Steve Wynn, has been taking a pounding in the press, thanks to a series of sexual misconduct allegations that hit the news in the Wall Street Journal.
When those stories were published, shares in Wynn’s company plummeted ten percent, before closing down another nine points. These losses have cost Wynn about $246 million in net worth, which, added with previous losses, brings the total to nearly half a billion dollars.
At this point, though, all those losses are just on paper, unless Wynn decides to divest himself of his stock at the lower price. He and his brand could come bouncing back if he is able to effectively defend himself in the press. At present, his main comment on the allegations is that they are, “preposterous.”
Regardless, the on-paper losses are a big deal for investors. Last year had been a banner year for Wynn’s company, as it saw a massive 132 percent gain in 2017. The growth has been based on strong financial showings. The resort is going gangbusters and did for most of 2017.
But things may change, and that could force the board to make a decision. Currently, Wynn is under contract through October 2022, nearly four years of what could be a very rocky time in the press. If there is some fire where all this smoke is, Wynn’s company could face boycotts or angry protests. In a hospitality business, that kind of attention is not what you want, especially in highly competitive markets.
In an effort to get out ahead of the story, Wynn Resorts’ board has launched an internal investigation into the allegations. In a statement published in part by CNN, the board said it is, “committed to operating with the highest ethical standards and maintaining a safe and respectful culture…”
At this point, though, there’s been no move to suspend Wynn, and there’s no indication that his position is in jeopardy. The company seems committed to the investigation, even as Wynn’s name continues to land on the negative side of the headlines.
In today’s environment, that could change very quickly. Roger Ailes and Bill O’Reilly both thought they had weathered storms at Fox before being sent packing when allegations stuck rather than fading away. That could happen with Wynn … or it’s possible these allegations could come to nothing. At this point, the board is choosing the careful route, not making any rash decisions or any very public statement actions. We will see if that trend continues.
Ronn Torossian is the Founder and CEO of the New York based public relations firm 5WPR: one of the 20 largest PR Firms in the United States.