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Addelson Loses 1 Billion Dollar Fortune in Las Vegas Sands

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United States
Member #47729
November 22, 2006
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Posted: December 28, 2014, 6:07 pm - IP Logged

Fate of One Big Player

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1 Man's $10 Billion Loss in Las Vegas Sands

Have you ever gone gambling and lost money? Well, sometimes the house loses too.

In fact, one Vegas Tycoon has watched nearly $10 billion of his fortune vanish in 2014.

Source: Flickr user Stuart Richards. 

The man
Sheldon Adelson is the Chairman and CEO of Las Vegas Sands (NYSE: LVS   ) a $45 billion firm that operates "integrated resorts" -- casinos with hotels, event spaces, and countless other amenities -- like the Venetian Las Vegas, Marina Bay Sands in Singapore, the Venetian Macao, and many others across the globe.

Adelson and his family.

But Adelson didn't start life in the lap of Las Vegas luxury. In 1933, he was born in Boston and was raised in a one-bedroom apartment that his parents and three siblings shared. His father was a cab driver, and his mother ran a small knitting shop. 

From an early age, Adelson's entrepreneurial ambition kicked in, and he began selling newspapers on the corner of a Boston street when he was just 12 years old. Upon graduating high school he joined the Army, and then he slowly but surely navigated the business world until he bought the Sands Casino in 1989 for $128 million after hosting the Comdex computer convention there for years. Then in 1996, he began building the Venetian, and the rest, they say, is history.

Source: Flickr user David Salafia.

The no-good year
But 2014 hasn't been the best of years for Adelson.

Las Vegas Sands has watched its stock plummet by nearly 30% on the year thanks to  declining revenue in Macau (essentially the Las Vegas of China) resulting from heightened government regulation. This has led many to question the long-term viability and growth potential of the company.

As a result, Adelson has seen nearly $10 billion of his net worth vanish, according to theBloomberg Billionaires Index.

But this hasn't been the first time Adelson has faced adversity. At the height of the financial crisis in 2009, Adelson's net worth fell from $28 billion to $3 billion as Sands amassed $10 billion in debt to finance more than $19 billion of expansions in Vegas, Macao, and Singapore during 2007.

The market crashed soon afterward, and the stock price of Las Vegas Sands plummeted by more than 99% from its peak in October 2007:

It even took $1 billion of investments from Adelson's personal cash pile to ensure Las Vegas Sands would remain afloat.

In a few years' time, the economy rebounded, and Adelson's company watched its stock price soar nearly 7,000% over the five-year period from its low in March 2009 to its peak in March of this year.

While Las Vegas Sands remains down from its peak, the reality is that Adelson's wealth still stands at a staggering $27 billion, making him the 23rd-richest man on the planet.

The years to come
So what does the future hold for Sheldon Adelson and Las Vegas Sands? Only time will tell, but as fellow Motley Fool contributor Dan Caplinger notes, all signs indicate that an investment in the company is anything but a gamble, and it presents a compelling investment case.

And when you consider that Adelson has been through this before, he's a tough man to bet against.

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[Editor's note: Updated the article title to better reflect losses in Las Vegas Sands stock versus losses in Las Vegas.]

Patrick Morris has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.