What happened at Las Vegas Sands Corp. (LVS) yesterday didn�t stay in Vegas.
The shares popped on Tuesday after the company announced a special $2.75 cash dividend on top of its annual dividend.
Wall Street reacted enthusiastically, and the shares rose more than 6% in afternoon trading.
Despite the stock�s sweet ride, some observers noted that while it helps some shareholders, the special dividend helps one person more than most: company Chairman Sheldon Adelson, already one of the richest men in the world. The logic is that with taxes expect to rise next year, now�s the right time for a billionaire mogul to give himself a huge payout.
Bloomberg NewsIn the moneyDeann Marin over at Wall St. Cheat Sheet noted that Adelson and his wife own 52% of the company and will earn close to $1.2 billion on the special dividend.
Our former Barron�s colleague Michael Santoli suggested the looming tax increase could just be an excuse to grab more cash.
�Too much piety draping these special dividends? Clearly family-run boards always itch to pay out the cash, use tax fear as cover,� he Tweeted.
Adelson was keen to portray the move is something else entirely:
The cash flow of our current operations and the strength of our balance sheet have put us in the enviable position of both returning capital to our shareholders while at the same time staying true to our roots as a growth company.
As Tweeters praised and bemoaned Tuesday�s ride at Las Vegas Sands, analyst David Bain at Sterne Agee & Leach noted that the dividend shouldn�t have an impact other projects.
�The announcement for a $2.75 per share special dividend is a shareholder friendly and efficient capital return to shareholders, in wake of likely tax policy changes next year, in our view,� wrote Bain.
�The dividend should not prohibit project financing for new and uncommitted projects — though it lowers expectation for such — and leaves sufficient equity capital for its slated Macau Parisian project.�
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