Caesars Entertainment Corp (CZR) faces a potential fine of $5.1 billion
Casino concern
Caesars Entertainment Corp (NASDAQ:CZR) is among the biggest losers on the Nasdaq. The stock is down 9.2% at $6.54, after a court examiner's report said the company could be
responsible for $5.1 billion in potential damages related to the bankruptcy filing of its operating unit. While this may be a tough pill for shareholders to swallow, bearish option traders certainly don't mind.
Skepticism abounds on Wall Street. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have
bought to open 18.46 CZR puts for every
call during the last 10 sessions. The corresponding put/call volume ratio sits in the bearishly skewed 88th percentile of its annual range.
Echoing this preference for puts over calls, CZR's Schaeffer's put/call open interest ratio (SOIR) comes in at 3.39, with
short-term put open interest more than tripling call open interest. What's more, the SOIR outstrips three-quarters of comparable readings from the prior year.
The negativity doesn't stop there, either. While just two analysts cover CZR, both consider it a "strong sell." Also,
short interest spiked 20.7% during the last two reporting periods, and now accounts for almost 28% of the stock's float. At its average daily trading levels, it would take close to two weeks for short sellers to cover their positions.
It's no surprise the Street is skeptical toward Caesars Entertainment Corp (NASDAQ:CZR). The stock's technical struggles extend well beyond today. In fact, since hitting an annual high of $12.48 in mid-April, the shares have surrendered nearly 48% of their value.
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