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Looks can be deceiving. Fundamental incongruity with MGM's stock move?

  • Despite the headline 20% growth in Strip revenues and 56% in Baccarat revenues (due to high hold) in August, Baccarat volumes remain a concern
  • Remember, throughout the downturn, Baccarat volume outperformed and kept Vegas barely afloat
  • Baccarat volumes have fallen 5 straight months YoY, which hasn’t happened since April 2003.  Operators we spoke to failed to supply any good answers.
  • We are becoming increasingly concerned that Strip fundamentals are lagging MGM’s stock move (we’ve been on the right side of that trade).  Slot volumes (still the most important metric) remain challenged and if this recent Baccarat trend is sustainable, investors may start scratching their head about MGM’s 76% YTD move.