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

Despite the seemingly good news, investors aren't that impressed.

A little girl looks grumpy about the crown upon her head.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

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.

More on Consumer Staples & Discretionary Shares

a woman ponders products on a supermarket shelf while holding a tin in one hand and holding her chin with the other.
Consumer Staples & Discretionary Shares

Down 12% over the past year, is the Woolworths share price a dead duck?

Is this a buy-the-dip opportunity for one of the ASX's largest shares?

Read more »

A happy baby drinking milk from a bottle
Consumer Staples & Discretionary Shares

This new catalyst could make A2 Milk shares a buy

A fund manager says A2 Milk shares are an exciting prospect.

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Consumer Staples & Discretionary Shares

This ASX 200 stock is sinking after its CEO quit amid 'inappropriate and offensive language' probe

The outgoing CEO doesn't recall making the alleged comment but has still decided to walk.

Read more »

Two happy shoppers looking at a smartphone together.
Consumer Staples & Discretionary Shares

Why this ASX fund manager can't stop buying Cettire shares

Cettire shares have been highly volatile in recent weeks, but this fund manager has been taking advantage...

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
52-Week Highs

Metcash share price hits 52-week high on broker upgrade: Time to buy?

Brokers have responded positively to its trading update.

Read more »

a young man wearing an open necked shirt and a stylish coat raises a glass of champagne as he smiles.
Consumer Staples & Discretionary Shares

Treasury Wine share price races higher on Chinese tariffs news

China could be opening back up to this wine giant.

Read more »

Three excited business people cheer around a laptop in the office
Consumer Staples & Discretionary Shares

Guess which ASX 200 retail stock is tipped to deliver 19% upside and a 6.5% yield in 2024

Big returns could be on the cards for owners of this share according to Morgans.

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Consumer Staples & Discretionary Shares

Metcash shares push higher on trading update

Investors have responded positively to this update.

Read more »