According to a Reuters report Sunday, gaming and resort operator MGM Mirage (MGM) has contracted Morgan Stanley to sell several of its casinos, and is already in talks with potential buyers of some of its assets.
According to a source familiar with the matter, the Las Vegas-based company is negotiating deals to sell its casinos outside of Vegas. These properties include MGM Grand Detroit and Biloxi’s Beau Rivage in Mississippi.
MGM has struggled with debt and liquidity issues amid the current economic crisis, and posted a $1.1 billion fourth quarter loss in late March.
On the heels of this report, MGM shares jumped 33% in early afternoon trading Monday.
The Bottom Line
Shares of MGM are way off of all-time highs of $100 hit at the end of 2007. The stock has tripled off near all-time technical lows of $2 per share. If the shares do pull back, we see the $4.50 level as a key area that must hold. We do not currently rate this non-dividend paying stock, but we do follow the stock and casino sector closely.
MGM Mirage (MGM) does not currently pay a dividend.
Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.
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