Following the closure of properties in mid-March due to the COVID-19 outbreak, MGM Resorts International MGM recently announced that it will reopen two properties in Mississippi. It also stated that these will be the first of the company's U.S. properties to reopen amid the pandemic.
MGM Resorts will be reopening Gold Strike Casino Resort in Tunica on May 25. This will be followed by the reopening of Beau Rivage Resort & Casino on Jun 1. Notably, each property will be allowing guests on an invitation-only basis.
However, upon reopening, these properties are likely to operate with limited amenities and capacity restrictions in accordance with Mississippi gaming commission guidelines. Notably, a 50% capacity restriction will be enforced along with social distancing protocols across table games and slot machines. It also emphasised on the "Seven-Point Safety Plan" initiative to ensure the safety and well-being of its guests and employees.
President and chief executive officer of MGM Resorts, Bill Hornbuckle stated, "As we plan to reopen our resorts, the health and safety of our guests and employees guide all of our decision-making. Getting many of our employees back to work and welcoming guests through our doors once again will allow us to do what we do best – entertain. We can't wait."
So far this year, shares of MGM Resorts have declined 54.4% compared with the industry’s 32.4% decline.
MGM Resorts has taken certain strategic measures to protect business in this crisis. This includes reduction in dividend payouts as well as decreased non-essential spending. Moreover, the company has the amended credit agreement and raised $750 million in new bonds to preserve cash and maintain ample liquidity to avoid a possible recession due to the coronavirus outbreak.
Although the virus has triggered a catastrophe in terms of lives lost and financial impact, the company appears resilient enough to navigate through these uncertain times. We believe that it will continue to monitor the COVID-19 crisis and adjust contingency plans accordingly.
MGM Resorts — which shares space with Caesars Entertainment Corporation CZR, Las Vegas Sands Corp. LVS, and Penn National Gaming, Inc. PENN in the Zacks Gaming industry — has a Zacks Rank #4 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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