1) The previous SGR Boards have been hopeless. 2) Bally is a clean slate start on a business that does close to 2$BILLION in revenues. 3) Bally will look to strip out anything non-casino out of the equation. That means sell all real estate OR put real estate into another entity. 4) Then they will look to streamline a business with approximately $2BILLION in revenue. 5) They will pay off all the fine debts and make sure it is fully compliant going forward. 6) What is the likely EBITDA on a casino business? 7) Let's say, 20-25%. 8) What is the CAP RATE of a CASINO? 10% 12%? 9) So LOW CASE 20% of $2B = $400M. Capped at 12% = $3.3 Billion Market Cap. 10) So, say the market is super pessimistic and they discount that by 50%. Still, $1.65B is still more than 5X today's share price. 11) Therefore, 5 X .11 = $0.55/ share is conservatively priced. 12) And $1.10-1.25 is probably fair market value. 13) Obviously, these assumptions will take time to prove out. But, a 5 Banger in 2-3 years is a pretty exciting proposition.
SGR Price at posting:
11.0¢ Sentiment: Buy Disclosure: Held
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