We use cookies to optimise our site and allow us and 3rd parties to tailor ads you see on sites. By using this site you agree to our cookie policy.


MGM Stock has Crashed 70% this month – but uptick sees investors buy again

MGM Resorts (NYSE: MGM) stand among the worst performers as the spread of coronavirus has created unprecedented damages in the tourism industry – including massive layoffs, expansion plans and the threat of bankruptcies. Executives from the tourism industry recently met US President Donald Trump to get a bailout package for the struggling industry.

MGM, which trades on the New York Stock Exchange, has announced a huge layoff plan along with the closure of all nightclubs, buffets and day clubs, fitness centers, spas, and salons in the wake of coronavirus. The company closed 150 food and beverage outlets and suspended its buyback plan.

However, shares in the group lifted 18% in Friday trading, following Securities and Exchange Commission filings earlier in the week that showed that 16 top MGM executives, including outgoing chairman Jim Murren, all upped their stakes in the company. Other investors also seem to be betting that it now a good time to get back into the casino business.

“As the nation grapples with the effort to contain the coronavirus, the travel industry has been challenged, and our company is no different,” acting chief executive officer Bill Hornbuckle wrote. “Business demand has decreased significantly. In response, we will temporarily close MGM Northfield Park tonight and have suspended operations of all nightclubs and day clubs. Our spas and salons will suspend operations as of Monday.”

MGM Stock has Crashed...

MGM stock price tumbled close to 70% over the last month to the lowest level since 2012, as investors believe coronavirus could have a long-term impact on plans for expansion in the casino and hotel business.

However, the management still believes they are in a good position to face a tough time.  The company had $2.3bn of cash at the end of the latest quarter, which its senior management claims is enough cash to weather the current uncertainties. Analysts add its asset sale strategy is likely to generate $8.2bn of cash in the coming days. MGM missed its earnings targets in the latest quarter, while the closure of business operations must point to further losses in the coming quarter.

Some investors believe government aid is among the catalysts that could drive its share price higher in the coming days. The American Gaming Association recently indicated that the US economy will get a hit of $21.3bn in consumer spending for an eight-week closing period.

Open a Stocks Account and Get $5 Free

  • Platform
  • Features
  • Rating
  • Visit Site
  • Sign up now and claim a $5 reward
  • Low minimum investment starting at $5
  • No minimum deposit to open an account
  • Fractional shares are available



    https://learnbonds.com/visit/StashCreate your account
    Hide Reviews
    All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.

    Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.

    HTML Snippets Powered By : XYZScripts.com