While many casino management teams are lamenting that their stocks are too cheap, Steve Wynn, chair and CEO of

Wynn Resorts

(WYNN) - Get Report

, is actually doing something about it.

After trading sharply lower this week on reports of deep declines in Las Vegas gambling, Wynn shares rebound Friday after the company announced a massive share buyback.

Wynn announced an increase of $500 million to its existing share-buyback plan, which had about $800 million left at the end of the recent quarter.

Wynn shares surged 12% in afternoon trading Friday, after having fallen more than 10% Thursday.

The buyback news, announced after the market closed Thursday, came on the same day that Wynn reported a 30% drop in earnings before, interest, taxes, depreciation and amortization at its Las Vegas casino in the second quarter. Wynn's Macau results were much stronger, with EBITDA rising 68% from a year ago.

Also on Thursday, Nevada data showed gambling revenue at Las Vegas Strip casinos fell 16.4% in May from a year earlier.

MGM Mirage

(MGM) - Get Report


Las Vegas Sands

(LVS) - Get Report

and Wynn plunged yesterday on the news.

Wynn's buyback announcement failed to help every stock in the casino sector Friday.

Penn National

(PENN) - Get Report

tumbled 8%. MGM, however, surged 7% and Las Vegas Sands was roughly flat.

So What's Eating Casino Stocks?

With nearly all casino stocks now down more than 50% from their 52-week highs, the sector got a lot of attention at the Oppenheimer Consumer Growth conference in Boston this week.

Several management teams, including those at MGM and


(PNK) - Get Report

expressed frustration at the fact that their shares continue to hit new 52-week lows and multiyear lows.

However, the sector, along with lodging and retail stocks, have become very popular short bets for hedge funds. With oil prices high, airlines are cutting back on flights to Vegas. As well, anything tied to consumer discretionary spending is an easy short. Many casino firms also have numerous development projects and high leverage -- which add to a bearish thesis.

Until more companies initiate large buybacks, there is no telling how much further casino shares can drop.

In one of the more comical moments at the conference this week, casino supplier

Bally Technologies


Chief Financial Officer Robert Caller told investors that he couldn't figure out why his firm's stock has fallen so sharply.

He must have not noticed the 325,000 shares sold by Bally insiders in May.

Wynn's buyback news is the second signal by the firm in recent weeks that its stock is too cheap. In late June, director John Moran purchased $1.7 million of the stock.

Merrill Lynch analyst Rachael Rothman called Wynn's buyback a "bullish signal."

"The increased authorization indicates Wynn views its own shares as its best use of surplus capital near-term," she wrote in a research note.

Rothman also said recent press reports that Wynn was planning an IPO of its Macau assets were unlikely given the market conditions and the increased share repurchase.

As originally published, this story contained an error. Please see

Corrections and Clarifications