Harrah's IPO: High-Risk Investment

Harrah's Entertainment is planning on going public this week despite financial troubles according to an article published by

. Harrah's is planning on going public at $15-17 and selling 31.25 million shares. 2010 has been a bad year for IPO's from private-equity sponsors and institutional investors have told Barron's "they won't participate in this deal because of the company's debt load and stock's lofty valuation." 3Q revenue for Harrah's was 2.3B and pre-tax cash flow fell 9%. Cash flow was also down 13% the first nine months of this year. According to Barron's, "Even assuming a 15% increase in 2011 cash flow to $2.1 billion, Harrah's would still be financially constrained given its high interest expense."