Boyd's Best Bet: Ditch the Casino, Sell the Land?

 

Boyd Gaming's(BYD) management must execute flawlessly on the company's ambitious Echelon Place development. Otherwise, the casino owner would be better off selling the entire 87-acre land parcel today, given the record prices being paid for Las Vegas real estate.

Boyd plans to break ground on the $4.5 billion Echelon Place project next month, with completion set for late 2010. The project, which sits on the northern part of the Las Vegas Strip on the site of the old Stardust Hotel, has been a contentious one for shareholders.

Several large investors, including some short-term-oriented hedge funds that own Boyd's stock, have urged management over the past year to sell the land rather than develop Echelon, buy-side sources say.

For now, Boyd's management isn't budging on its plan. But given the buzz surrounding Kirk Kerkorian's interest in buying the Bellagio and City Center development project from MGM Mirage(MGM), it's a great time for Boyd to explore alternative ways to monetize the value at Echelon Place.

Development Doubts

Echelon -- the largest project Boyd has ever developed -- will consist of five hotels, a 140,000-square-foot casino, a large convention center and several other resort attractions. Its size has left some investors concerned, as has its location.

Echelon will sit on the northern-most part of the Las Vegas Strip, which is considered the next growth area of the city. But it's uncertain how well this region will eventually perform, even if developers continue to grab older properties in the area with plans to rebuild them as luxury resorts.

TheStreet Premium Services    For Personal Service: 877-471-2967

Jim Cramer
Jim Cramer's Action Alerts PLUS:
Trade right alongside a Wall Street pro — enjoy access to his Charitable Trust portfolio and be sent trade alerts BEFORE he makes a move. Learn More
New: ETF Profits
ETF Profits:
Get money-making ideas from the hottest investment vehicle on the planet. Our experts show you how to play various ETF sectors to help pump-up your portfolio. Learn More
OptionsProfits
OptionsProfits:
Get 50+ trade ideas a week from the industry's top options experts. Plus — exclusive commentary on market trends and essential trading tools. Learn More
Doug Kass
Real Money:
Our team of professional Wall Street Pros — including Jim Cramer, Doug Kass, and Nicholas Vardy — delivers intelligent analysis, timely trade ideas, and colorful commentary. Learn More
Stocks Under $10
Stocks Under $10:
Break into the market with small- and mid-cap stocks... all $10 or less! David Peltier tells you exactly which low-priced stocks he's buying and selling. Learn More
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
blog comments powered by Disqus
Dow Jones S&P 500 NASDAQ 10-Year Note
12,779.58 1,342.58 2,908.44 19.74
Oil *
117.31
DOWN
110.88
DOWN
9.37
DOWN
18.79
DOWN
0.73
10 Yr
1.97%
SPDR Gold
167.34
-0.86%
-0.69%
-0.64%
-3.57%
Data delayed 20 minutes

Top Stories and Tools

Brokerage Partners

After the Bell

Before the Bell

Booyah! Newsletter

ETF Daily

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

We respect your privacy.
Podcasts

Connect with TheStreet