Vail Resorts stock drops $1.63 as rumors fizzle
Amid rumors that a possible sale of Vail Resorts had evaporated, its stock was drubbed Tuesday as investors shed it with near triple the average trading volume.The stock hit a two-year high of $19.62 Friday before retreating to $17.99 at close of trading Tuesday. The month-long spate of sale rumors – none confirmed – drove the company’s stock up 35 percent in June. Investors often invest in companies that are rumored to be sold because they can often profit from the bump in sales price.More than 217,000 shares of Vail Resorts stock traded hands Tuesday, nearly thrice the average of 79,000 shares.Vail Resorts has declined to comment on sale rumors, or anything else for that matter. Company chief executive Adam Aron e-mailed employees July 9 following a story in the Denver Post indicating the company was for sale. Aron’s letter revealed little.”For many years, our company has had a firm policy of not commenting on rumors or speculation that surround hypothetical transactions about which we may or may not be involved,” he wrote. “Accordingly there is nothing I can say to you that would either confirm or deny the Post’s story.”He followed that up with another company-wide e-mail that hinted he may have been hampered by a confidentiality agreement, which precludes any comments about possible sales and is typical during such negotiations.”In the next several days there may be more press stories speculating about the future of your company,” he wrote. “You are the heart and soul of making Vail Resorts successful and I want to make sure that I communicate with you whenever I can. “However, as you know, there are clear limits in what I properly can say at this time to anyone, even you. Accordingly, as was the case in my July 9 em-mail to you, there is nothing I can say now that would either confirm or deny the many rumors, consistent with our long-standing company policy.”Aron also hinted that the company’s year-end earnings statement, which will be made public in September, should contain good news.”Our fiscal 2004 year ends Saturday, July 31,” he wrote. “It has been an incredibly successful year for just about every single part of Vail Resorts”The company’s third and typically its most profitable quarter, driven by peak ski season business, resulted in a record $62.5 million net profit for the company.Cliff Thompson can be contacted via e-mail at firstname.lastname@example.org or by calling 949-0555 ext. 450.