This commentary was originally posted on RealMoney by Jeff Dorman.
The 8-K filed by
Las Vegas Sands
contains standard language regarding possible default if the company can't get in compliance with its maximum leverage covenant (requires maximum leverage of 7.5 times on Dec. 31, 2008).
The language in itself is not a big deal, and the stock move is an overreaction based purely on the 8-K, because this is
new news ... it was already known that Las Vegas Sands needed to raise equity and/or get a waiver from the banks to remain in compliance with this leverage covenant. However, if the company's lenders
accelerate, LVS stock is worthless.
This article was written by a staff member of RealMoney.com.