Icahn as Gekko – Just in Time for Wall Street 2

Bud Fox: “Why do you have to wreck this company?”
Gordon Gekko: “Because it’s WRECKABLE” – Wall Street
Now, I’m not saying that Carl Icahn wrecked the Fontainebleau – the Fontainebleau’s ample ambition wrecked itself.  But I couldn’t help but think of Gordon Gekko’s “Wreckable” comment when I read the NY Post story (h/t VegasRex) about Gekko selling off the furniture out of the Fontainebleau.
“After picking up the bankrupt Fontainebleau Las Vegas on the cheap, billionaire investor Carl Icahn is now holding a fire sale at the massive unfinished casino resort. 

While the project, which is 70 percent complete, sits idle on the Las Vegas Strip, Icahn has started selling off beds, dressers, TVs and other furnishings, according to a source. 

The sell-off, first reported on GamingToday.com, comes after the billionaire investor conceded last month that he has no imminent plans to restart construction.

Icahn raised eyebrows in January, when he bought the 3,800-room resort for $151 million, allegedly without doing any due diligence. The cost to finish the project could hit $1.6 billion — not including furniture”

I’m no sort of Icahn fan-boy at all – I thought he screwed up royally when he bought the Fontainebleau – but is it possible that this was his plan all along?  People said “Carl – you’re crazy – Vegas is dead, and this project still needs billions,”  but maybe all he was after was bulk discount furnishings?  Seems unlikely.  Also, I’m a little surprised that the project has much in the way of furnishings, considering that it’s $1.6 Billion away from completion ???   I would have thought that furnishings would be done much closer to the completion. I’d love to know if Icahn turns a profit on his distressed purchase/liquidation.

The NY Post article does provide us with some fantastic No-Shit-Sherlock quotes:

“The move by Icahn, who is known for picking up distressed assets and flipping them, suggested he was betting on a recovery in hard-hit Las Vegas and would eventually turn around and sell the casino for a higher price.

Stripping the rooms one by one is yet another sign that he plans to unload the project rather than resume construction, according to one source.”

Ya think?  You don’t think he was just unhappy with the firmness of the mattresses? That’s something Steve “The Nuts” Wynn would actually probably do – replace all of the mattresses before they’d even been used once because he didn’t like the firmness – but not Icahn.

We get another version of the same quote:

“Jefferies analyst David Katz said if the Fontainebleau is selling furniture, “It suggests Icahn’s view is a rapid recovery in Las Vegas is not at hand.”

Either that or he’s like Harvey Keitel’s Winston Wolf from Pulp Fiction – an “oak” man (I hope someone gets that reference).  
Which brings me to Vegas and general American Economy bull, John Paulson, who took a large stake in MGM common stock earlier this year.   Dealbreaker recounts John Paulson’s quote at a recent dinner:
“As this is the best time in 50 years to buy homes,Paulson advised a group at New York’s University Club, crowded into 3 separate dining rooms, to issue 30 year mortgages to buy a home as “your debt and interest payments get locked in at record lows, while the price of your home will rise.”

“If you don’t own a home buy one,” Paulson recommended. “If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.””

Oy vey.  Really, Paulson?  Buy another?  Buy a third?  Lend to your relatives?   Yeah – I don’t see how that could possibly go wrong.   Maybe Paulson should have bought the Fontainebleau – furniture and all, from Icahn…


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