聚焦 Golden Entertainment 的“财富转移”：$GDEN

Every now and then, there is something stock-specific in the stock market that I think is an interesting situation. My hope is that shining some sunlight on it, using my very small, niche platform, can create a better situation for all shareholders.

Today, I’m going to be talking about Golden Entertainment. The ticker there is GDEN. I am long; this is not investing advice. See the full disclaimer I talked about at the beginning of the show. I’m going to dive into a deal they recently announced at a big premium that, despite the big premium, I think is a dramatic wealth transfer from minority shareholders to insiders in this take-private.

I’m going to go through all of the reasons why I think it’s a dramatic take-private and all of the reasons why I think that, as engaged shareholders—not looking to form a group, but as engaged shareholders looking at this situation—you should be reaching out and saying, “This is insane. This is a wealth transfer from me, a minority shareholder, to the management team. This deal needs to be restructured, split in a hundred different ways.” If we do that, we can get to a fair outcome for all shareholders. I’m going to detail all that, and we’re going to get there.

Today, I am doing one of a rare—not unheard-of, but rare—solo episodes. This is because there’s a specific situation in a specific stock that I want to shine some sunlight on. As I like to say, sunshine is the best disinfectant. I didn’t come up with that. I wish I did. I wish I was that smart.

The company I want to talk about is Golden Entertainment. The ticker there is GDEN. I’m going to disclaim multiple times that I am long. The title of this presentation is “Stopping a $300 million wealth transfer,” and I’m going to put “wealth transfer” in quotes. Let’s dive into it.

Let’s start with a quick disclaimer. I am long the stock, and I want to shine some sunlight on this process. As I’ve said multiple times, nothing on this podcast is investing advice. That’s always true, and it’s particularly true today. Again, I’m biased. I would like this process to result in a higher bid. So, let’s dive into it.

In October, there was a theft from the Louvre. About $100 million worth of jewels were stolen. This theft captured the imagination of the world. I don’t think it’s unfair to say that stories were run everywhere. I’ve got a screenshot here of the Google AI results. There’s AP News, NBC News, and The New York Times.

You go into media, SNL’s “Weekend Update,” and Bowen Yang comes out as George Santos and reveals he did something with her valuables. Jesse Eisenberg was going around joking that the Louvre heist was a promotion for Now You See Me 3. Comedians were joking about it. Everyone knows about the heist at the Louvre.

Why do I mention that? Because the Louvre heist pales in comparison to the legal—fully legal—wealth transfer that is happening at Golden Entertainment. If the deal that they announced last week to do the sale-leaseback/take-private goes through, I believe it will result in a wealth transfer of $300 million. That’s 3 times the value of the Louvre. It will result in a wealth transfer from minority outside shareholders to management. I’m going to break all that down in a second, but let me back up a second.

In any heist, and in any thriller—I’m a big reader. I love to read mysteries. I love to read thrillers—you read any thriller, and at the end there’s going to be a smoking gun. The history of the smoking gun is actually interesting. It dates back to the 1800s. Obviously, you needed guns for there to be smoking guns.

I think it became popular when a Sherlock Holmes story used a smoking pistol rather than a smoking gun. A smoking gun is the strongest circumstantial evidence you could have. Direct evidence would be: I see Mary shoot Jane, and I go testify as a witness. That is direct evidence.

Circumstantial evidence is when you don’t have direct evidence. You don’t have someone who saw the person shoot someone, but you know that you’re looking for a suspect, and the suspect holds a gun that is smoking. You can use that to put 2 and 2 together.

Now, you could never definitively say it, because maybe you found someone with a smoking gun and thought they shot the person, but they had fired the gun up into the air. Or you think Mary shot Jane, but it turns out that Todd over there shot Jane, then handed Mary the gun and ran away for some reason, right? So, you never know, but a smoking gun is the strongest circumstantial evidence.

I think the most famous smoking gun would be the Nixon tapes. In the Watergate scandal in the ’70s, there was the smoking-gun tape on which Nixon discussed a cover-up, if I remember correctly. That’s the history of a smoking gun.

Why did I mention that? Again, any theft, any wealth transfer needs a great smoking gun. Any story needs a great smoking gun. I think there’s a smoking gun at Golden Entertainment that reveals that the management team knows exactly how much money is getting transferred to them here.

This is what Golden Entertainment’s investor-relations website used to look like. This is from the Wayback Machine, from April 15, 2025. I can tell you that I was looking at Golden Entertainment’s IR website as recently as Thursday, November 6. As recently as then, it looked exactly like this.

There are 7 boxes here. As of Friday, the IR website looked a little different. This is what the IR website looked like on Friday, and I’m recording this Sunday, November 9. This is what it looks like right now as I’m recording it. You’ll see there are 5 boxes.

What are the 2 boxes that are missing? Where have we gone from 7 to 5? Well, we’ve dropped off the Presentations box and the Conference Calls box. That’s weird. Why would a management team decide to change an IR website, especially an IR website that had looked this way for so long?

Again, the Wayback Machine said it looked like this in April. I’m telling you, I saw it on Thursday. It looked like this on Thursday, to my memory. Why would they choose to change this on Friday? Why would they drop off the presentations and conference-call sections of the website? Glad you asked.

They used to publish an IR presentation once every 3 months, and it would walk through: “Here are our properties. Here’s our value.” Perhaps they didn’t want this IR presentation out because one of the things the IR presentation talked about was, “Here’s why we think our gaming markets and our assets are so attractive.”

Many of their assets are in Nevada. Nevada is one of the largest, fastest-growing, richest places in the United States. It’s a really attractive market. “We think our assets are really attractively positioned.” Perhaps that’s why they took this out.

Or perhaps it’s because the Golden Entertainment deal to go private is getting structured as a 2-part deal. There’s a sale-leaseback to VICI, and then there is the take-private of the OpCo. I’ll talk about that in a second, but they used to publish in their slides what it would look like if they did a sale-leaseback of all this real estate they owned. They would say, “Hey, if we did a sale-leaseback, you are creating the OpCo for free.”

Our real estate assets would cover the entire value of our stock price, and you'd be creating the OpCo for free. Not only would they give you slides that said this, but management would talk about it all the time. I've got a quote here from their Q3 2024 deck where the CEO says, “Look, in our deck, we provide some math around the value of our real estate and how that may drive value certainty in our share price.”

Given that their math shows the OpCo is essentially free if you buy their shares, and they're buying back shares, it's not just words and images saying, “Hey, our stock is cheap.” They are backing this up with action. They are constantly buying back shares at around $30, or under $30, per share. This action is not insignificant.

The management team here owns a lot of stock. The management team that will be taking the company private owns more than 25% of the stock. So if they're buying back stock, it's because they believe their remaining shareholdings will increase in value significantly. They believe what they're pitching.

That is my smoking-gun evidence. They take all the times they've talked about this—all the presentations they've done that highlight the value, the real estate value, and the fact that the OpCo is being created for free—and they take it all down. So why do they take it all down? Let's break that down.

Again, the deal is structured into 2 components. VICI Properties will do a sale-leaseback of the real estate under 7 of Golden's casinos. In return, VICI will pay down some of Golden's debt. VICI will assume and pay down roughly $425 million of debt, and VICI will also give each Golden shareholder about 0.9 shares of VICI common stock, worth about $27.25 per Golden share.

So that's one side of the transaction: shareholders get about $27.25 per share in VICI common stock. The other side of the transaction is that the management team will buy the remaining operating assets—the casinos and the local taverns that Golden owns—for $2.75 per share. Those are the 2 sides of the transaction.

You combine those together, and you get roughly $30 per share. That is the headline value Golden is talking about when it says, “Hey, we're getting taken out for this big premium.”

Let's break that down. Sale-leasebacks are not uncommon in casinos, and they're not uncommon in real estate. A casino owns all this real estate, and the real estate just sits there. They say, “I need to pull a financing lever,” and a sale-leaseback is not uncommon. Golden has been highlighting for 18 months that it could do this and create a lot of value—that it could pull that lever if it wanted to.

Interestingly, the sale-leaseback terms were not disclosed in Golden's press release. You have to go to the VICI press release to find the terms and see that VICI and Golden will have the Golden OpCo paying VICI $87 million per year in rent. It's kind of weird. Why would they not disclose that? Perhaps they didn't want shareholders to be able to do the math.

Again, in 2024, Golden owned all of this real estate, so it wasn't paying rent. Its EBITDA was $155 million in 2024. On an LTM basis, Vegas has been a little soft, so it would be about $10 million below that, or $145 million. But to make it easy, because I'm doing the screenshot, let's use $155 million.

They're doing $155 million in EBITDA. We have to take $87 million of rent away from that because previously they owned the casinos, and now they'll be paying rent. So $155 million minus $87 million means the OpCo EBITDA comes out to, if I'm doing the math right in my head, about $70 million in EBITDA.

Keep that number in your head for a second. What is that $70 million of EBITDA worth? Humorously, EverBay Capital—I’ve never talked to them, don't know who they are, and have never talked to them—published a letter on November 6. Literally 15 minutes after the take-private deal was announced, EverBay Capital published this letter saying, “Hey, Golden, I think you should pursue a sale-leaseback. I think you should pursue it, and here's what our value math says.”

They published this letter, so I don't know if they saw the deal and rushed it out, but it doesn't mention the deal. It just mentions the value-creation opportunity. Everybody thought the remaining OpCo could do $50 million per year in EBITDA. Again, I've got it at $70 million based on the 2024 numbers, but we can split hairs. You can change the numbers all you want.

They thought it would do $50 million and be worth a modest—and this is their quote—“modest” 5.5× multiple. If we apply that 5.5× multiple to the roughly $70 million in EBITDA that I was talking about, everybody thinks this company would be worth $376 million. The OpCo, after the rent expense, would be worth $376 million in value.

Golden has just over 27 million shares outstanding. That would imply that the OpCo is worth just shy of $14 per share. If you use my $70 million or so of EBITDA, and you use EverBay's 5.5× multiple—and again, you can do the math on your own—you can change the numbers. You can say, “Hey, earnings have been a little weak so far this year. Let's use $60 million. Let's use $50 million.” Whatever. That's fine. You can use those numbers. You've got the numbers; you can change them all.

However, if you go back to the deal as I presented it to you, management is buying this OpCo. This OpCo, which on my numbers is doing $70 million per year in EBITDA, is being bought by management for $2.75 per share. Multiply that by 27 million shares outstanding, and management is buying the OpCo for $75 million.

They are buying the OpCo for, on my math, 1× EBITDA. If they're buying it for $75 million, and I'm using the EverBay multiple, at 5.5× it's worth $376 million. That is $300 million of wealth being transferred from minority shareholders to management through this OpCo deal.

So what's the solution here? I've given you the smoking gun. I've given you the math. You can change it all around however you want. This OpCo business is not worth 1×. There is no world in which this OpCo business is worth $75 million. There's not a world where it is worth $2.75 per share.

I follow lots of gaming companies. You can debate whether it's 4×, 6×, or 8×. You can debate whether the right number is $50 million, $60 million, or $70 million—whatever you want. There's no world where this OpCo is worth $75 million. That valuation is management stealing money. Stealing, sorry, I’m not accusing. This is a legal wealth transfer. They are legally taking that money from shareholders and transferring it to themselves through this deal.

One more point on OpCos like this: I believe EverBay mentions this in the letter, but again, I follow these. You can lever these up 2.5× or 3× very easily. The management team here could do this deal, cash out shareholders at roughly 1× EBITDA, relever the company, and take out a dividend.

If they're buying it for $75 million, there's a world where they pay minority shareholders $75 million. Actually, they own 25%, so they pay $50 million, but they're valuing the OpCo at $75 million. They could do a dividend recap, take on 2× to 2.5× leverage, and take out a $150 million dividend. Take $150 million minus $75 million, and they would be left with $75 million in cash plus control of the OpCo.

So they would get all the cash, double their valuation instantly, and have control of the OpCo. This is a wealth transfer of the highest order.

What's the solution here? Let's talk about solutions. I have no problem with the sale-leaseback. There are 2 terms and 2 sides to this deal: the sale-leaseback and the OpCo take-private. The sale-leaseback is a nifty piece of financial engineering that accelerates value realization. That's fine. The issue is with the valuation of the OpCo and the OpCo take-private.

There are several things they could do. Number 1, there's a go-shop here. They could run a full and fair go-shop. That's great. I love go-shops. However, I will tell you that go-shops, when a management team is taking a company private, are rife with conflicts of interest.

Why do I say that? The management team is preparing the numbers, and the management team is talking to the bidders. The management team can—I mean, I know if somebody makes me do something I don't want to do, I'm kind of ornery. I don't want to answer their calls. I'm lazy, I'm sloppy in responding to them, and I respond to them briefly.

Management teams can do all that. They can publish sandbagged numbers, and they can do all sorts of things. That's always true, but it's particularly true in a regulated industry like gaming because you need gaming licenses.

The management team can talk to the regulators and say, “Hey”—the management team can talk to the regulators. I'm going to pause this for 1 second. Sorry about that.

My wife—I’ve mentioned this on the podcast before—is 9 months pregnant. I got 5 phone calls from her. I was like, “Oh my God, I need to end this pitch halfway through because I'm going to the hospital.” But no, she and the baby were just visiting to say hello. So I will try to—I’ve lost my train of thought. I'm going to hop back into it, but if this is crazy, that's why.

Anyway, I believe I was talking about the go-shop and why they don't work. I love go-shops, but it's difficult because if it's a management take-private, management can actively dissuade bidders. They cannot be particularly cooperative.

The other thing is that this is a regulated industry. These are casinos, and there are gaming regulators. Management can go to the gaming regulators, and the gaming regulators can let any unfriendly bidders know that they're not welcome here. Management can say, “We're the people you want to work with. We don't want to transfer the licenses.”

So it's a very, very tough situation for a go-shop to work.

Go-shops are always difficult because people are starting behind the eight ball. They have to ramp up. There’s already a price in place, all this structure, all of this. But I think it’s really difficult when management is taking a company private in a regulated industry with license transfers like gaming.

So there is a go-shop, but here’s what I would propose. The go-shop needs to be done in a fully fair and transparent way. Another issue with the go-shop here is that it needs to be done in such a way that any bidder can bid on the OpCo and inherit the VICI deal. Because if you put Golden up for sale and say, “Hey, the whole casino is for sale,” you’ve got the sale-leaseback. Somebody coming in has to enter into a new sale-leaseback and find all of this. People should be able to bid just on the OpCo if they want. We need to maximize value for shareholders here.

What I would propose is that the go-shop needs to be run in the classic cliché: a fully fair and transparent way. But what that means is bidders need to be assured that the company’s not going to have regulators lean against anyone. Management needs to say, “Hey, look, we want to take this company private, but if a bidder is coming and they want to offer minority shareholders $7.50 per share instead of $2.75 per share, we can roll our equity with them or we cannot roll our equity with them, whatever they would prefer. They can get the same treatment that we’re getting.” Obviously, the VICI sale-leaseback needs to be portable with every shareholder.

Here are other things I think need to happen. I’ll flat-out say it again: this is a $300 million wealth transfer from minority shareholders to the management team. If this deal goes through at $2.75, it is an absolutely insane price. It just needs to be bumped. If they come out and say, “Hey, the go-shop failed,” then I say, “Cool. We still need the deal to be bumped.” There were so many issues with the go-shop. This still needs to be bumped. It is a huge wealth transfer.

There is no reason that, when the proxy comes out, shareholders shouldn’t be able to vote on these 2 deals separately. Again, the deal was announced almost 48 hours ago, right? It was announced on Thursday, and I’m recording this on Sunday. We haven’t seen a lot of things. We haven’t seen the price. We haven’t seen anything. Shareholders need the ability to vote on these 2 deals separately.

There’s no reason to combine them. I’m pretty sure when the price comes out, it’s going to say, “Hey, do you want $2.70 per share in cash plus the VICI stock, or do you want no deal?” There is a third choice. The sale-leaseback, as management has noted numerous times in those presentations that I was showing you earlier, can be done independently of the OpCo going private. Shareholders need the ability to vote on both sets of transactions.

Do you want the sale-leaseback that gets us 0.9 shares of stock, plus pays down all the company’s debt? Do you want that? Do you want the OpCo private, or do you want both? We should be able to vote on that separately because, to me, I’m completely fine taking the sale-leaseback and then having this OpCo company with no net debt that does $50 million, $60 million, or $70 million per year in EBITDA as a standalone stub trade. I’m completely fine with that.

And guess what? Many of the things that management wants to do by taking the company private, they could do in the public shell. They could do everything that they’re thinking about in the public shell. There’s no reason this has to go private except to transfer wealth to the management team. Now, if they want to pay a fair price, that’s fine. But you could leave this as a StubCo, then you could do the re-lever transaction I had talked about, and you could probably pay a $5 per share dividend to everyone.

So I think that we should be able to vote on this separately. I think the go-shop needs to be implemented in a full and fair way. Short of that, I think the OpCo deal needs to get bumped any which way.

I think I have rambled quite a bit. Again, my wife called me 5 times, and I thought it might be something, so maybe I got a little disjointed. But I’ve been doing this for 10 to 15 years, and I don’t think I’ve ever seen a transaction quite this egregious.

I can think of a few egregious transactions, but the way this is being structured—where you say, “Hey, the headline price, the premium it paid, is what you focus on,” but all of that premium is coming from the sale-leaseback, and management is effectively being able to take control of the OpCo for a song—I just can’t think of many things more egregious. It will be such an enormous transfer of wealth to the management team if they are able to do this at the same time.

So what are the solutions here? I went through it: the go-shop needs to be run fairly, and the vote needs to be split. What are the solutions for minority shareholders? I will say I’m not trying to form a group with anyone. I’ve disclosed that we’re long the stock. Obviously, I’m talking my own literal book here, right? But I’m a big believer in shareholder governance.

I think the thing that shareholders can do is reach out to the Golden Entertainment team and say, “Hey, this is insane. Forget Andrew’s math. Andrew’s math—he doesn’t know anything. I wasn’t a math major. He doesn’t know anything. Here’s my math on the numbers.”

Again, I present a lot. The EBITDA number I gave you, the $155 million, is the 2024 EBITDA number. The sale-leaseback rent is from the VICI press release. You can do your own math. It’s not going to come out too different from mine, but you can do your own math. You can say, “Here’s my math. Here’s the value I’m seeing. Management needs to pay a fair price for this. We are going to vote against this transaction. If you don’t, we’re going to hold management’s feet to the fire. We’re going to hold the board’s feet to the fire.”

All of these things need to be communicated to the company. The company has to know that, by taking the presentations down and by taking the conference calls down, they were showing you that they knew there was some vulnerability. They knew that if you dug deep enough, you would find the smoking gun in the conference calls. It didn’t take much digging, right? I knew this. I’ve been following the company for years. I instantly knew.

But I think they relied on, “Hey, people won’t dig.” And by the way, maybe we’ll just take the big headline premium. But no, the answer is that the headline premium comes from the sale-leaseback. They’ve been touting that for years. That lever was always available to them. It’s available as a public company. It’s available as a private company. These need to be separated and voted on separately. Shareholders need to communicate that.

If that happens—if the sunlight comes out, if the smoking gun is exposed, if they are held accountable for that—I think there is a transaction structure in which the management team can do well and take the company private, but shareholders can get much more and much fairer value for their stock.

So I’m going to wrap it up here. Again, I apologize. My wife called me 5 times, and I thought it might be something, so maybe I got a little disjointed. I don’t think I’ve ever seen a transaction quite this egregious. It is just insane to me that they could do this. It’s ballsy. It reminds me of the Luby’s heist, except in a fully legal—not transparent, but fully legal—way. I’m hopeful that by shining some sunlight on the process, I can help get fair value for everyone.

Nothing on this podcast should be considered investment advice. Guests or the hosts may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial adviser.