MGM GOES GLOBAL

If it quacks like a duck...

 

In the breaking news department MGM MIRAGE announced they've changed their name again, this time to MGM Resorts International.  I'm not sure if this is going to help the multiple but hey it's worth a shot.  We remember other MGM incarnations:  

 

  • THE Las Vegas company - nobody wants to be this now
  • A Brand company - yes they have some management opportunities but fee revenue will never be close to owned EBITDA
  • A P/E stock (until the accounting for acquired intangibles leveled the playing field.  Negative earnings aren't great for P/E either)
  • Back to EV/EBITDA now that WYNN and LVS trade at a premium and the huge tax advantages of deriving most of your profits in Macau isn't captured in EBITDA
  • And most recently, a Convention company - with only 11% of room nights from conventions last year, this doesn't pass muster, but hey, Goldman signed on and the stock has moved higher

 

Their perception goal is pretty transparent here.  However, it doesn't really change the reality that MGM is highly leveraged to the domestic hotel casino market but with a small convention business and an even smaller international presence.

 

I'm guessing that 'MGM Resorts International' won out over 'MGM Conventions And Brands Worldwide' and 'Anything But Domestic Gaming Incorporated'.


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