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Crown (ASX:CWN) share price wobbles despite class action settlement

Despite the seemingly good news, investors aren’t that impressed.
The post Crown (ASX:CWN) share price wobbles despite class action settlement appeared first on The Motley Fool Australia. –

The Crown Resorts Ltd (ASX: CWN) share price is in the red. It comes despite the casino operator settling its class action launched by shareholders.

At the time of writing, shares in Crown are trading for $9.94 – down 1.68%. For context, the S&P/ASX 200 Index (ASX: XJO) is 0.71% lower.

Let’s take a closer look.

Crown class action conundrum closed

In a statement to the ASX, Crown announced it had “reached an agreement to settle the shareholder class action commenced against it on 4 December 2017 in the Federal Court of Australia”.

Crown disclosed the total settlement amount at $125 million inclusive of interest and costs.

The settlement is still subject to Federal Court approval, as well as other conditions. Crown did not admit to any liability as part of the settlement.

Crown says it expects to recover a “significant portion of the settlement amount from its insurers but cannot at this stage be certain about the outcome of negotiations with insurers, or the outcome of any necessary formal steps for recovery it may need to take.”

The class action was launched, alleging Crown “engaged in misleading or deceptive conduct from December 2014 through to October 2020”.

The Crown share price fell on the news.

What else has affected the Crown share price recently?

The biggest story affecting Crown this week was the news the Victorian government would not strip its Melbourne casino of its gaming licence, in line with the recommendations of the Royal Commission into the company.

The Crown share price rocketed over 10% on the news.

As The Motley Fool reported at the time, the 8-month royal commission uncovered what Commissioner Ray Finkelstein described as “disgraceful” conduct. However, the company’s recent reforms have inspired hope it could be suitable to run Crown Melbourne in the future.

Commissioner Ray Finkelstein said in his final report

“It was inevitable that Crown Melbourne would be found unsuitable to hold its casino licence. No other finding was open. The only difficult question was what should be done in that circumstance.”

However, Crown was not entirely left off the hook. It was essentially placed on a 2-year probation by the Andrews Government. The company must appoint a special manager to oversee its activities. If the special manager is not satisfied Crown is fully reformed, its licence will be automatically cancelled.

Crown share price snapshot

Over the past 12 months, the Crown share price has increased 18.9%. Year-to-date, however, shares in the company are only up 0.51%.

Its 52-week high is $13.32 – at the height of takeover speculation, and its 52-week low is $8.22.

Crown Resorts has a market capitalisation of about $6.7 billion.

The post Crown (ASX:CWN) share price wobbles despite class action settlement appeared first on The Motley Fool Australia.

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More reading

What should investors know about the Crown (ASX:CWN) share price after the royal commission?

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ASX 200 (ASX:XJO) midday update: Crown and Pilbara Minerals surge higher

Crown (ASX:CWN) share price surges 9% as Victorian casino licence pronounced safe

5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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