cole
744 posts

cole
@CoIeAnderson
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$SPHR, Sphere Entertainment, is one of my favorite watchlist stocks. This is the company that owns the Las Vegas Sphere, a 17,600-seat venue featuring an 160,000 sq ft LED interior screen. The company is current valued at $1.2B with an enterprise value of $2.1B. The Sphere's construction cost was $2.3B. Earlier this month, Gabelli Funds projected $200mm in annual EBITDA which already makes this a solid value. U2's inaugural show has been wildly successful and it's 2-year option is projected to be worth $2B in revenue (margin unknown). The Sphere can run multiple such residencies simultaneously, show IMAX-style shows during the day, and generate $400mm in annual high-margin advertising revenue. The future looks bright for non-gambling tourism in Vegas with the addition of F1 and a baseball team, the upcoming Super Bowl, and the '28 Olympics. There's already been talk of building a new sphere in London, and given that the Saudi's would likely be an interested financier, we could also see one in Dubai or Doha. Hospitality assets tend to get absolutely crushed in recessions. If we get one next year, this is a stock that should be on your radar. Keep in mind that financial repression and big fiscal deficits tend to increase inequality, and a growing upper middle class is precisely the demographic that splurges on these kinds of experiences. $SPHR has not given specific financial guidance for the arena or the entire company. If we get a nice dump before earnings on 11/8, they may provide such details which would be a repricing catalyst.











