Steve Wynn is out as CEO of Wynn Resorts, Limited (Nasdaq: WYNN) amid accusations of sexual misconduct. Wynn officially announced he is stepping down on Tuesday, and investors and analysts see his departure as good news for the company.
Wynn stock surged more than 7 percent on Wednesday morning. It had sold off by more than 17 percent following a January report by the Wall Street Journal alleging a pattern of inappropriate behavior by Wynn.
In a statement, Wynn does not admit any wrongdoing, but says his departure was the right move for the company. “As I have reflected upon the environment this has created – one in which a rush to judgment takes precedence over everything else, including the facts – I have reached the conclusion I cannot continue to be effective in my current roles,” Wynn says.
Wynn has denied the allegations against him and says they are claims his ex-wife made in court as part of a legal battle. Wynn’s departure from his casino company comes just days after he stepped down as finance chief of the Republican National Committee, which reportedly raised more than $130 million to support President Donald Trump in the 2016 election.
J.P. Morgan analyst Joseph Greff upgraded Wynn stock to “overweight” and says Wynn’s resignation reduces the company’s negative regulatory risk.
Morgan Stanley analyst Praveen Choudhary says Wynn shareholders now have a new uncertainty with which to deal.
“Some investors might consider the resignation of Steve Wynn as the removal of an overhang on the stock, but we think that many uncertainties remain around who will be the controlling shareholders in future,” Choudhary said, according to Reuters.
Prior to the allegations, Wynn stock had been on fire thanks to a return to strong growth in the Macau, China market. In January, Macau reported…
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