Boston, MA 03/12/2014 (wallstreetpr) – Boyd Gaming Corporation (NYSE:BYD) was making headlines during and after Tuesday trading session. But that exciting atmosphere around the stock can hardly be traced in the current session. So far the stock has maintained its downward rally, sort of overturning its own benefits yesterday.
Shares of Boyd Gaming Corporation (NYSE:BYD) were seen changing hands at $13.71, showing decline of 0.29 percent as at 11 a.m. EDT.
Around the same hour yesterday, Boyd Gaming Corporation (NYSE:BYD) had already climbed 20 percent, hitting the biggest intraday high since July last year.
Boyd Gaming Corporation (NYSE:BYD) is an operator of gambling and casino properties that span many jurisdictions, but more profound in Las Vegas and Atlantic City.
Story That Change The Stock Direction
The market was in excitement as report emerged that Boyd Gaming Corporation (NYSE:BYD) would be made to adopt the structure of a real estate investment trust (REIT), thanks to activism of Elliott Association LP. This line of thought was picked after the hedge fund revealed position in the stock. And as it is known to do, putting forward a proposal for a REIT structure that would result in more shareholder value seems possible.
Adopting REIT structure is something that has been tried, tested and proven by other casino and gaming operators. A case in point for which Elliott might cite if indeed such thoughts are on its cards is Penn National Gaming Inc (NASDAQ:PENN). This company a created a REIT by spinning off Gaming and Leisure Properties Inc (NASDAQ:GLPI) that currently owns its casinos. REITs usually pay out pretax earnings as dividend.
If a REIT structure is to be realized in Boyd Gaming Corporation (NYSE:BYD), then it means Boyd family which owns 30 percent stake in the company would need to trim its position.
Boyd Gaming Corporation (NYSE:BYD) is currently a loss-maker with little to be excited about in terms of performance, but a promising future if the management executes well.
Investor Takeaway
While Elliott has not come out clean about its speculated REIT proposal to the Boyd Gaming Corporation (NYSE:BYD) management, that cannot be a farfetched thought. Basically, at the center of everything is desire to maximize investor value in the company and if REIT proves to be holding the key, then investors will most likely be behind it in full swing.
