Shares of Golden Entertainment (NASDAQ: GDEN) surged on Friday following remarks from company executives hinting at potential strategies to monetize the casino operator’s real estate assets. The comments were made during a conference call discussing the company’s third-quarter earnings report. CEO Blake Sartini acknowledged that Golden shares trade at significantly discounted multiples compared to industry peers and emphasized that the company will not remain passive in its strategic review. This indicates that Golden Entertainment might be more inclined to sell assets rather than acquire them, considering the scarcity of compelling acquisition opportunities in the current market.
CFO Charles Protell elaborated that Golden is scrutinizing the financial implications of its real estate holdings. The Las Vegas-based company currently owns all the real estate underpinning its eight casino hotels. These properties include three venues in Las Vegas, three in Pahrump, Nevada, and two in Laughlin. Protell did not specify whether a sale of some or all of Golden’s property assets is imminent.
Speculation arose last month that Golden could consider monetizing some of its property holdings to enhance shareholder value. The earnings call marked the first instance where executives publicly addressed the examination of their real estate assets. B. Riley analyst David Bain noted that during the call, Golden Entertainment was more transparent than ever, signaling its intention to not remain idle from a corporate strategy perspective should share prices stay near current valuation levels. Bain highlighted that Golden has set a high threshold for acquisitions given its valuation and is actively evaluating the value of its real estate.
Bain suggested that if Golden were to adopt an asset-light model by divesting its real estate, the stock could be conservatively valued at $42 per share, a substantial increase from its current trading price of roughly $32. While selling real estate would create long-term liabilities due to rent obligations under sale-leaseback deals, it would significantly boost the company’s cash reserves, which could be allocated to other value-generating opportunities.
Among Golden’s property assets, The Strat, located near the Las Vegas Strip, stands out as the crown jewel. This venue could command a significant portion of Golden’s $871.25 million market capitalization in a potential sale. Bain argued that given Golden’s exclusive focus on Nevada and the state’s prominence as the premier gaming market in the US, shares of Golden Entertainment should not be so heavily discounted relative to its peers. The analyst also noted that Nevada offers a foundation for Golden to grow its earnings before interest, taxes, depreciation, and amortization (EBITDA). Furthermore, the company is demonstrating its belief in the stock’s value by repurchasing shares.
 shares soared as executives hinted at real estate monetization strategies during the Q3 earnings call, signaling a proactive corporate strategy.){kind=link}