In welcome news for Star Entertainment Group Ltd (ASX: SGR) stockholders, Star Casino shares are in the green on Wednesday.
Shares in the embattled S&P/ASX 200 Index (ASX: XJO) casino operator closed yesterday at 12.0 cents and are currently changing hands for 12.2 cents apiece, up 1.7%.
While any gain will be appreciated, the Star Casino share price remains down a precipitous 77.5% since this time last year.
And if that sounds bad, investors who bought the stock on 1 October 2021 will be nursing losses of 96.5%.
Ouch!
As you're likely aware, the ASX 200 stock has come under heavy selling pressure over the past two-plus years amid ongoing regulatory issues that have threatened to shut down its gambling businesses.
Legal action from the Australian Securities and Investments Commission is ongoing today, with ASIC alleging that Star's former executives breached their directors' duties.
And as the woes piled up, investors continued to favour their sell buttons, fearing Star Casino shares could collapse.
Time to sell Star Casino shares?
After the massive two-year decline in the share price, it may be tempting to call a bottom on Star Entertainment Group stock.
But Morgans' Damien Nguyen doesn't recommend it (courtesy of The Bull).
"The embattled casino operator's future is unclear as it attempts to find a solution to its financial woes," said Nguyen, who has a sell recommendation on Star Casino shares.
Nguyen noted:
Second quarter revenue of $299 million in fiscal year 2025 was down 15% on the first quarter. It announced a second quarter (EBITDA) [earnings before interest, taxes, depreciation and amortisation] loss of $8 million, which was an improvement on the EBITDA loss of $18 million in the first quarter.
Addressing Star Entertainment's asset sales, which the company hopes will give it enough money to stay afloat, Ngyuen said:
On January 29, 2025, the company announced a divestment of its Star Sydney Event Centre assets subject to conditions. The shares have fallen from 56 cents on February 7, 2024, to trade at 12.2 cents on February 6, 2025.
As for his outlook for Star Casino shares, Nguyen concluded, "We don't see a turnaround in the company any time soon."
What's been happening with the ASX 200 casino operator?
Star Casino shares closed up 13% on 29 January at 13.0 cents apiece when the company announced the Star Sydney Event Centre divestment Nguyen mentioned.
Should it go through, Star will receive around $60 million for the assets.
And on Monday, 10 February, shares leapt 13.6% when the company reported that it had received non-binding proposals from Chow Tai Fook Enterprises and Far East Consortium International to acquire Star's 50% interest in Destination Brisbane Joint Venture.
Despite those two big days of gains, Star Casino shares have plunged some 36% in 2025, as investors still worry over potential insolvency.
After announcing the Star Sydney Event Centre divestment in January, management warned that if the company can't secure more funding, "there remains material uncertainty as to the group's ability to continue as a going concern".
