Star Entertainment shares continued to sink to new lows as investors decided they did not want to gamble by staying on in the troubled Australian casino stock.
But some buyers picked up shares at a record low of 10 cents as large volumes of shares were traded on Friday.
At 3:15 pm (4:15 am GMT) the Star Entertainment (ASX: SGR) share price was 11.5 cents, down 0.15 cents (11.45%) on the day, having traded between 10 and 12.2 cents, and giving it a market capitalisation of A$372.9 million.
By that time 127.5 million shares had been traded on Friday, about 4% of the shares on issue but about seven times the average volume of the last 90 days.
The stock is plumbing new lows in the wake of the company’s revelation it will be challenging to meet the conditions to draw down additional funds as its cash runs down.
It had A$79 million at 31 December, including $100 million from the first tranche of a new debt facility, down from $149 million at 30 September 2024.
Analysts said Star may not survive to the end of next month at the rate it is using cash.
Morningstar analyst Angus Hewitt told clients in a note that the company would be lucky not to run out of money before its interim results on 28 February.
“We now incorporate a 50% probability that Star falls into administration, and equity holders are wiped out,” Hewitt was quoted in The Australian as saying.
In a client note Jefferies analysts said they did not expect an improvement in earnings in the short term and they expected cost-cutting to be challenging.
“Balance-sheet issues are significant, and can’t be ignored,” they were quoted in the Wall Street Journal as saying.
At time of writing, the Queensland and NSW Governments could not be reached for comment on whether they could assist Star because it has casinos in both states that pay hundreds of millions of taxes and provide significant employment.
Star paid $424 million of government taxes and levies in the 2024 financial year, down from $456 million in the previous year, according to the 2024 annual report.
Before the Liberal National Party returned to power in Queensland late last year, the previous Labor Government ruled out providing tax relief.