I'm one who is certain if 60% of management compensation
was tied to shareholder value as it relates to stock price, management
current meandering process in getting the debt down would pick
up a step or two. Maybe someone needs to put another call in to KK,
telling him its time for another SEC filing, on his desire to increase is
stake up from19% to 25% . I'm curious doesn't management know
that if KK put in another $500 mil in direct equity into the co and you
sold 1 or 2 small casinos making up addition $500 mil together totaling
$1,000,000,000 toward paying down the debt...(the debt covenants should
have improved) WS would reward management and shareholders with a
higher stock, you bet they would....why do you think MGM's turnaround story
is having such a hard time finding "its voice"? Just maybe the slow as you go
thinking and attitude which hindered the co's understanding of how big Macau was
going to be is still an Achilles heal at the co. Do you really think the economy
is going to continue improving once rates start going up....Once the velocity
of money gets going, the FED is NOT going to be able to stop rates from
going up....Come on, the street see's Vegas recovery as very slow at best,
regardless, of the small percentage increases in RevPAR. So why not pick
up the Debt repayment a step or two. How much market cap did the company
lose today......just imagine paying down the debt by that same Billion Dollars
you lost in market cap today
You'll never get that to happen. That's like saying Obama should resign since he's broken every campaign promise that he made and has plunged us an extra $7 trillion in debt. His administration has been involved in countless scandals and his approval rating is at 40%....yet he remains, and will remain, our President. Unfortunately, the real world doesn't operate the way that we would like it to. Rewards based on performance are a thing of the past. We just have to hope business continues to rally and management works at improving margins. We have no other recourse except to sell our shares because management is going to do what it's going to do, regardless.
All I know is that the stock market has gone UP since he took over as President. As an investor, I would think you'd want a president who would help you make money ... duh?
I to live in the real world and I was NOT saying this managemnt or anyother mangament in this day and age would serious consider taking a pay cut in dollars, but seriously, management option packages should not be so one sided. I agree with every word as it relates to the Obama administration. As relates to what can be done by you or me, not much, but Kerkorian still has enough sway to move the needle forward, I know that for a fact. I see know reason why he would want to trust is equity position in MGM long after his death(he's approaching 100yrs old) other than a hope and a pray that management will be able to pay down debt at a faster pace than there are now....It's his legacy his money and MGM's management holds the keys to either quicken the pace of debt repayment or not. I see no reason why he would not be pushing management to get the debt down more than just under control, so the qtrly conf calls would not need to make a big deal out of $80 mil interest saving a yr BECAUSE rates have been artificially held down
As I have told you before, you my friend, are the only one that gets it! Everyone else on this board seems to think that revenue will solve all problems. They could keep increasing revenue and they still will not turn a profit. This management team is very comfortable with their compensation packages, and no one will turn the heat up on them to increase shareholder value. They were pleased that they paid 77 million on a 13 billion dollar long term debt.
Even their friends the analysts lobbed softballs on the Q&A. I'm not sure that KK has the same interest anymore and only someone like Ichan could rattle them. Paulson never says a thing. They have assets but refuse to sell them, including the Crystals money pit that they refused to accept any of the offers they had several months ago.
Macau is minor to this company because they keep losing market share so they have to turn their Vegas ops around. On the call today they only discussed 1st quarter revenue and nothing about 4th quarter guidance. Guess we know why they tanked today. keep up the good analysis and maybe someone in management may gleen something from your wisdom.
Thanks. I am fortunate I bought low and use option strategies to increase the value of my position.
I have been emailing management for over the past three years. .......trying to get a pulse. I find the lack of any mention of how the debt is going to paid down at a pace that's ahead the 3% increase in RevPAR insulting. Damn! we all know and so do they what has to be done. Either raise equity or sell some of the casino's that have little growth potential ahead of them, and no, a few pecentage points of growth is NOT going to cut it. If management would paid down debt by 1.5bil dollars, part small equity raise( I know it's dilutive but I bet the stock would rally big time) and 2nd part sale of a few casino's that would add meaningful value not only in dollars saved in not paying interest , but a higher valuation for the companies core casinoS. Personally, I believe just like when Macau MGM was having difficulty raising funds KK steeped in and helped which set the ship afloat for a successful equity raise.(I remember emailing them before it was announced that what they needed to do was have KK come up with some money to invest in China which would guarantee a success fund raise)and when they needed some funding state side, it was kerkorian who called one of his friends, Phil Ruffin, and negotiate the sale of Treasure Island. This is as much about Kirk Kerkorian's legacy as it is any else for him.