So while everyone has been fixated on the arrests of Crown...

So while everyone has been fixated on the arrests of Crown Resorts employees in China, the Melco Crown share price has quietly rallied +21%. Given Crown Resorts owns 27.5% of Melco Crown, this equates to an increase in value of their shareholding of approx A$600m, or just over 7% of the current Crown Resorts market capitalization.

The company have previously announced that "contribution to Crown Group profits attributable to the international VIP gaming program play business from mainland China visitors is substantially less than 12%".

Therefore if you assume the extreme case where the China VIP business goes to zero (a 12% hit to earnings/market capitalization), then a large proportion of this lost value has already been filled by the A$600m gain from the company's Melco Crown shareholding.

Even if every Crown Resorts employee is charged and convicted in the next few days, the selloff in the share price is clearly overdone. Feels like we are headed into the $12's rather quickly, to get back to fair value.