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The Company owns and operates three casino hotel properties in Atlantic City, New Jersey: Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino and Trump Marina Hotel Casino.
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7dogs (93.37) Submitted: 5/30/08 2:57 PM : Start Price: $3.51 TRMP Score: -52.29
Yesterday Trump announcec the pending sale of the Marina Hotel Casino in Atlantic City for $316 million. Buyer and Seller also agreed to end prior, unrelated litigation, when the deal closes. The prospective buyer plans a Buffet approach. That's Jimmy Buffet, not Warren. The casino is planned to operate under the "Margaritaville" trademark. Here's a Margarita toast to Jimmy Buffet and Donald Trump. If this deal closes, it may buy Trump time to weather the downturn. Outperform.
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huddaman (97.16) Submitted: 6/05/08 10:58 AM
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He has a mounting debt of around $1.6B on this company. Good thing its not a S-Corporation, otherwise he would be looking at personal bankruptcy.Selling the property for $316 has two effects.a) It will reduce its debt load by that much b) It will reduce the revenue and hence gross profit that he generates from this hotel. He has a healthy GP margin of 45%. But unfortunately, all those casions cost a lot of money and the money they borrow costs interest, so his NetIncome is reduced by around $333mil in interest. I don't think this company is only losing money in downturns. If that was the case, you would be right. They lost money in 2005, 2006 as well. Good times will roll in, but that won't increase their revenue or reduce their interest cost. In fact, good times will bring higher interest costs, and thus bury them deeper.
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