shares tumbled 6% Monday morning after the company announced that its much-respected chief executive will be departing.
In a press release Monday, Trump Entertainment said CEO Jim Perry is retiring to be with his family in California. Several New Jersey newspapers, however, reported that Donald Trump, the company's non-executive chairman and largest shareholder, fired Perry.
A Trump spokesman said Monday that Perry resigned. He declined to comment further.
Perry helped orchestrate a turnaround at the casino operator after it emerged from bankruptcy in 2005, and his departure comes as the company is eyeing a buyout. Trump announced in March that it had hired bankers to explore a sale, and it said last month that it received preliminary indicators of interest.
reported Monday that Donald Trump fired Perry on Friday just as talks to sell the company "hit some hurdles." The newspaper said Perry was the only Trump board member to vote against a sale of the company to Dennis Gomes, a former Atlantic City casino executive who has submitted a bid for the company for an unknown price.
If Trump is not sold, the departure of Perry is disappointing news for investors.
"It's a bad scenario if he leaves and they don't announce somebody else," says Eric Green, portfolio manager with Penn Capital Management, one of Trump's largest shareholders.
Green says Perry's departure likely signals an impending sale of the company. He expects a sale to occur at a price higher than the market expects because of Trump's significant asset value -- even though Atlantic City gaming revenue has fallen in recent months because of competition from the introduction of slot machines in Pennsylvania and New York.
"Most analysts are scrubbing the numbers based on the last three months of Atlantic City numbers," Green says. "Whoever is buying this thing is buying it for the future of Atlantic City."
However, the downside for Trump shares is if a sale doesn't occur and Donald Trump gets involved once again in the day-to-day operations of the company, Green says.
Donald Trump ran the company into bankruptcy, Green says, and he believes the stock could fall to $12 if Trump takes on an added role.
Shares recently were down 99 cents, or 6.2%, to $14.92.
article, Donald Trump was quoted as saying the odds of a sale of the company to Gomes, the chief bidder, were 50-50 and that the sale process would be completed by the end of this week. Reports have said real estate investment firm Dune Capital Management is the other bidder for Trump.
Mark Juliano, the company's chief operating officer, will become the interim CEO, Trump said.