As if watching crude oil crumple wasn’t enough for me, now MGM is up over 1% on an announcement that Morgan Stanley believes their room rates will increase 5% this quarter, despite economic soft-ness references.
MGM will have its day; just give it time.
AEC and AWK are shrugging off the news; CLP and BG are recovering; and the spot for silver is modestly higher.
Only CCJ challenges me.
And for the day so far, I’m up a little over .6%.
Soon, my losses for the year, at present an obnoxious (6%), will be broken under the marching feet of profitability.
Enjoy your weekend, friends. You can bet that Cain Thaler will be.
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MGM: I can buy the 5% room rate increase as demand is strong, but this is the fundamental problem with casinos…they are no longer casinos. They are a hotel plus restaurant, plus spa, plus video arcade, and oh yeah we also have some tables and slots.
I’m all for revenue diversification, but this industry has totally shifted away from what made the stocks truly valuable. If I’m an owner, I don’t want a bunch of putzes coming in and having $200 dinners. I want to fill my rooms with degenerates that are going to lose control, max their credit card, and drop $5k when they only planned to lose a couple hundred.
I’d disagree; the resort like features are saving their asses right now. If they were just tables and games, they’d all be going under.
With the $200 dinner model, you get business conventions and the like, which is a good crowd to have getting drunk around your games anyway.
Captain $5K will be around again one day; but he isn’t out at the moment.
Well, it’s saving them, but then again, if they hadn’t spent BILLIONS on the resorts they wouldn’t need saving. A tiny box with tables and slots will do the trick. Let’s see how long it takes Cosmo to generate anything that even slightly resembles a good return on investment.
Like I said, I think it’s good to diversify revenues, so having all the toys is a good thing…I just think that when you go too far, you are no longer a casino, but rather a hotel and restaurant that happens to be in Las Vegas. They will always make money, but I wouldn’t give it the same multiple that I would a more “pure play” situation.
By the way, if you wanted something to dig into relating to MGM, I am amazed at how much convention space they have in total. Something north of 2 million SF, I believe. I walked around the space at Bellagio for the first time a few visits back and was impressed with the number and size of the rooms…very under-appreciated there. And of course, Mandalay has their 1.7 million SF of space, even though it is very far from the world and outdated. I’m sure being able to host conventions at their locations (as opposed to the convention center or Sands) helps drive revenues in the other segments of their properties.
Haha, CitiCenter may very well go down in history as the worst decision made of all time.
I definitely agree with you there.
“Resorts & Casinos” have all been on fire lately, I assumed because of the summer months.
I was looking to get into LVS on a pullback but I might just jump in next week.
Good posts from you today.
CCJ late day rally!
Days end, up a percent.