Ok, this one is really simple: Archon's enterprise value is $300M while its real estate is worth $550M.
I am typically not a fan of real estate plays because this paper value might take eons to unlock, however this is not the case with Archon. Its main property, 27 acres on the Strip, is expected to be sold to a Texan real estate developer for $475M, $40M of which have been put for down payment this summer. Archon also owns wwo buildings in Massachusetts and Maryland bought for $82M and $63M each back in 2000. In addition company runs a small casino in Nevada that has lost $2M in 2007 - probably the factor that accounted for the stock reaching the levels we're at right now.
Applying a long-term capital tax rate to the Strip property gives $400M income once transaction is consummated. Assuming that other properties are worth what Archon paid for them gives another $145M. What is the casino business worth? It generates $30M in revenues, but because it lost money recently lets just ascribe it a 0 value. Altogether company's value is $550M, or backing out the debt - $79 per share vs $39 right now.
The catalyst here will obviously be the property sale which should happen this or next year. However even if the sale falls through, Archon still owns a piece of property in an incredibly fast-growing market, that even at a discount of 20% to currently agreed purchase price implies a very handsome upside to the stock.
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