MGM | Negative Social Media Isn’t a Good Thing

07/23/18 11:39AM EDT

Editor's Note: Below is a brief excerpt from a recent research note written by our Gaming, Lodging & Leisure analysts. If you are an institutional investor interested in accessing our research email sales@hedgeye.com. 

MGM | Negative Social Media Isn’t a Good Thing        - z mg

MGM’s controversial and miscommunicated press release to sue the victims (and families) of last October’s shooting incident appeared to be making waves through social media last week via the hashtag #boycottMGM. 

Soon after, MGM came out publicly and said it only wants to protect itself from liability from survivors/families of slain victims and is not asking for compensation under the 2002 Anti-Terrorism Act.  

Some media consultants said that this poor PR strategy from MGM could hurt their bookings and image in the short-run. 

The chart below indicates the number of social media impressions (via Twitter, Instagram, Facebook, etc.) that each hashtag has accumulated since the hashtag was first used.  Note, the number of “impressions” is simply an estimate of how many social media participants have come across the hashtag since inception. 

MGM | Negative Social Media Isn’t a Good Thing        - zmg

In comparison to other big company crises, #boycottMGM has been more popular, especially when you consider how much smaller MGM is vs. Starbucks.  Starbucks said their #boycott has had little impact on its company fundamentals, but our restaurants team is skeptical of that notion. 

As for MGM, we’ll see how the company addresses it on their upcoming conference call on August 2nd – either way, negative social media presence isn’t a good thing…       

© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.