MGM's 14 billion dollar debt should not be increased. It's the only reason that MGM shares are sitting at 18 and change. Without the debt, MGM could pay a dividend, earnings would be much better, and the stock price would be much higher.
I find it interesting that among the big three casino stocks trading this morning, the one performing the worst is the one who will be announcing earnings in a few hours.
Over the last month, MGM has trailed the S@P by two per cent, and hasn't reached 20 since the first week of June. Is MGM becoming dead money? The chatter in this stock also has greatly decreased recently.
In the last 52 week period, MGM has usually been trading above 20; however beginning in May, it has usually been trading under 20. It has been lagging the markets over this time period, without any major news being reported, except Kirk's passing, which did little to move the stock. Does this portend a bad upcoming quarterly report? Or some other bad news not yet announced? Thoughts?
When the big money decides that AA has bottomed and is undervalued, the turn northward will be swift and powerful, as shorts will be covering at the same time new money will be pouring in. This scenario is eventually coming, the question is, sooner or later?
For three weeks MGM has traded between about 17.50 and 19. Today, it jumped up to 19 and then immediately retreated to 18.60. And this happened while Morgan Stanley downgraded MGM China. At the present, MGM appears to be nothing more than a vehicle for day traders to buy at the lower range and sell at he higher range.
Yesterday MGM plunged 8%; so far today its recovered about half of yesterdays losses. Investors feel that selling off their Reno properties was a mistake. They are now more dependent on Asia than they were two days ago. Their strength is in the U.S. China will always be a gamble. Selling Reno was a bad move.