Golden Entertainment, the company operating The Strat casino hotel near the Las Vegas Strip, has decided to ramp up its share repurchase program. The company’s board of directors approved adding $100 million to its existing buyback plan, bringing the total capacity for repurchasing its own shares to $131.4 million.
CEO Blake Sartini mentioned that they expect business conditions to improve in the fourth quarter and with the increased share buyback authorization, they plan to continue acquiring their own shares throughout the year. This move is part of Golden’s strategy to return capital to shareholders in a tax-efficient and flexible manner.
Golden has a history of fulfilling its promises to buy back shares, demonstrating its belief in the value of its stock, which has seen a 22.92% decline year-to-date. In the third quarter alone, the company repurchased over 815,000 shares at an average price of $31.65 per share, totaling $25.8 million. Additionally, in October, they repurchased an extra 134,613 shares for $4.2 million. Year to date, Golden has repurchased nearly 2 million shares at an average price of $30.70 per share, amounting to $59.5 million.
Despite the challenging market conditions, Golden’s balance sheet remains strong, with $68.6 million in cash and cash equivalents and a borrowing capacity of $240 million by the end of the third quarter. The company’s ownership of the real estate where its gaming venues are located provides additional stability.
There have been rumors about Golden potentially selling and leasing back one of its land-based casinos to improve its cash position, but no official comments have been made regarding this speculation. Such a move could increase the company’s cash reserves but would also lead to long-term rent obligations.
Overall, Golden Entertainment’s decision to boost its share repurchase program reflects its confidence in the company’s long-term prospects and commitment to delivering value to its shareholders. As business conditions improve and the gaming industry rebounds, Golden’s strategic initiatives are poised to benefit both the company and its investors.
