Caesars Entertainment Stock Does Not Appear to be a Good Gamble

http://tiny.cc/4lvuny Secret sale offer at Caesars
It's that time of year again! Back-to-school shopping is on many parents' minds, so I decided to take a look at some numbers on back-to-school shopping. No surprise here, 83% of supplies are bought before school starts. I think that's the way it's probably supposed to be. A couple of surprises: 45% of technology is bought online, and 31% of school clothing is as well. I don't know about you, but I don't like to buy my clothes online. They never seem to fit right and then you have the hassle of sending them back. 87% of direct school supplies like pens, papers and protractors (if those are still used in school) are still bought in stores. The company of the day is Caesars Entertainment (CZR.) The stock has a 52-week high of $9.91 and a low of $5.39; it closed today at $6.35. A judge ruled today that the company must pay $11 billion to bondholders, which is not included in the company's current debt. This comes from a complicated situation a few years ago and could force the company to go into bankruptcy. Don't worry, they will still have that beautiful casino in Las Vegas and New Jersey, but will be operating under bankruptcy if this happens. Eventually someone will probably step in and buy the assets for pennies on the dollar. Who loses in the situation? The stockholders. If they remain until the end, they will lose their entire investment. Caesars Entertainment is owner of the World Series of Poker brand, and also own 12 casinos with 14,000 slot machines and 1200 gaming tables. The numbers don't look very good for Caesars; sales are down 41% and earnings-per-share down 25%. There are a lot of problems on the balance sheet; accrued expenses are $1.9 billion a large increase from last year's $759 million. Current debt is $6.9 billion, which does not include the $11 billion the judge says the company owns to past bondholders. The equity now stands at $673 million, well below last year's number at this time of $1.8 billion. I would highly recommend investors stay away from this stock. It's very high-risk and more than likely shareholders will lose their entire investment. Your odds may be better at the crap table.