Caesars Entertainment Inc. (CZR) shares experienced a significant surge on Wednesday, climbing by 5.42% to $43.01, following the company’s announcement of a new $500 million share repurchase program. This comes after the successful completion of its previous buyback initiative. The announcement signals a strong belief in the company’s future prospects and a commitment to enhancing shareholder value.
Simultaneously, Caesars announced plans to offer $1 billion in senior notes due 2032 through a private placement to qualified institutional buyers. The funds raised from this offering will be used to redeem, repurchase, or tender a portion of the company’s existing 8.125% senior notes due 2027, alongside covering related fees and expenses. It’s important to note that these new notes will not be registered under the Securities Act and are only available for sale to institutional buyers and individuals outside the United States.
Share repurchase programs are generally viewed favorably by investors as they reduce the number of outstanding shares, potentially boosting earnings per share and increasing the value of the remaining shares. By authorizing another buyback, Caesars indicates its belief that its stock is undervalued and presents an opportunity to enhance shareholder returns.
How to Invest in CZR Stock:
If you’re interested in participating in the market for Caesars Entertainment, whether by purchasing shares or even attempting to bet against the company, understanding the process is crucial.
Buying Shares:
The most common method is through a brokerage account. A wide range of trading platforms are available, many of which allow you to buy ‘fractional shares,’ enabling you to own portions of stock without purchasing an entire share. This is particularly useful for stocks like Berkshire Hathaway or Amazon.com, where the cost of one share can be substantial. With CZR currently trading at $43.89, an investment of $100 would allow you to purchase approximately 2.28 shares.
Betting Against the Company:
Betting against a company, known as short selling, is more complex. It requires access to an options trading platform or a broker who allows you to ‘go short’ by borrowing shares to sell. This process involves borrowing shares from a broker and immediately selling them in the market, hoping the share price will decline. If it does, you can repurchase the shares at a lower price, returning them to the broker and pocketing the difference. However, if the share price increases, you will incur a loss. Short selling is a risky endeavor and should only be undertaken by experienced investors.
Options Trading:
Another option is to buy put options or sell call options at a strike price above the current trading price. Both strategies allow you to profit from a decline in the share price.
Current Market Data:
According to Benzinga Pro, CZR has a 52-week high of $49.65 and a 52-week low of $31.74.
