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Barron's
Aug 25 2011
Kerkorian's $215 Million Sale of MGM Stock
By GRACE L. WILLIAMS | MORE ARTICLES BY AUTHOR
The billionaire's Tracinda Corp. sold 20 million shares of the gaming firm.
MGM Resorts International has seen an uptick in insider activity over
the past few days as one major investor partially cashed out and two
executives stepped up to the table to play their hands at investing in
the resort and casino.
On Aug. 17, private holding company Tracinda Corp., run by billionaire
Kirk Kerkorian, sold 20 million shares of MGM (ticker: MGM) for nearly
$215 million, an average of $10.74 each.
This is Tracinda's first transaction of the year. On Nov. 12, 2010, it
sold 4.2 million MGM shares for $52.2 million, an average of $12.52
each.
Following the latest transaction, Tracinda continues to indirectly
hold 111,173,744 MGM shares, roughly a 22% stake.
A key player in the development of Las Vegas into a lodging and gaming
capital, Kerkorian has been chief executive, president and the sole
director of Tracinda since 1976.
Through a spokesman, MGM Chairman and CEO Jim Murren wrote in an
e-mail, "I have not met a more generous man in my professional life
and at every turn he has been a supporter of MGM. After all he has
given us over the years, there is no one I can think of who is more
deserving to have the flexibility in his investments so as to enjoy
his life.
"Just as a reminder, Mr. Kerkorian is our largest shareholder and also
just recently invested $50 million in MGM China."
Sean MacNeal, an analyst with InsiderScore.com, says, "The sale was
executed at $10.74 [a share] and the stock didn't hit that price that
day, so he sold at a discount. You never want to see a large
shareholder sell a chunk of shares at a discount, and it's possible it
was a cash-raising maneuver."
MacNeal also notes that after Tracinda's sale, two executives bought
into MGM for the first time, adding to their indirect holdings.
On Aug. 22, Chief Marketing Officer William Hornbuckle bought 20,000
shares for $184,000, an average of $9.22 each, and Chief Operating
Officer Corey Ian Sanders bought 10,000 shares for $97,400, an average
of $9.74 each. Sanders now indirectly owns 22,804 shares while
Hornbuckle indirectly owns 20,000 shares and directly owns 12,605
shares.
"It's the first time executives at MGM have bought in at least eight
years," says MacNeal. "Tracinda's sell was tough to swallow from a
shareholder standpoint from the discounted aspect, so execs stepping
up softens the blow."
MGM stock reached a 52-week intraday low of $8.92 on Aug. 31, 2010.
Shares climbed after that date, and on Jan. 18 reached a high of
$16.94. MGM stock has backed off since then, and trended closer to the
low, closing at $9.81 on Thursday.
On Aug. 9, Credit Suisse's director and senior gaming, lodging and
leisure analyst, Joel Simkins, remained cautious on MGM and maintained
it at Underperform while lowering the price target to $10 from $11
after MGM reported a strong second quarter.
In an interview with Barrons.com, Simkins says Credit Suisse is
cautious on MGM given its Vegas exposure. "Surprisingly trends in
Vegas have been pretty solid to date, but 30% of Vegas' room nights
come from conventions. We're concerned that there could be pullback.
"We currently favor regional casinos as people stay closer to home.
They can get on the local river boat, play $50 in the slot machine and
get dinner...especially with gas prices coming down," he says.
Credit Suisse makes a market in the securities of MGM.
http://online.barrons.com/article/SB50001424052702304121204576530831365940362.html?m od=BOL_hpp_oe
Aug 25 2011
Kerkorian's $215 Million Sale of MGM Stock
By GRACE L. WILLIAMS | MORE ARTICLES BY AUTHOR
The billionaire's Tracinda Corp. sold 20 million shares of the gaming firm.
MGM Resorts International has seen an uptick in insider activity over
the past few days as one major investor partially cashed out and two
executives stepped up to the table to play their hands at investing in
the resort and casino.
On Aug. 17, private holding company Tracinda Corp., run by billionaire
Kirk Kerkorian, sold 20 million shares of MGM (ticker: MGM) for nearly
$215 million, an average of $10.74 each.
This is Tracinda's first transaction of the year. On Nov. 12, 2010, it
sold 4.2 million MGM shares for $52.2 million, an average of $12.52
each.
Following the latest transaction, Tracinda continues to indirectly
hold 111,173,744 MGM shares, roughly a 22% stake.
A key player in the development of Las Vegas into a lodging and gaming
capital, Kerkorian has been chief executive, president and the sole
director of Tracinda since 1976.
Through a spokesman, MGM Chairman and CEO Jim Murren wrote in an
e-mail, "I have not met a more generous man in my professional life
and at every turn he has been a supporter of MGM. After all he has
given us over the years, there is no one I can think of who is more
deserving to have the flexibility in his investments so as to enjoy
his life.
"Just as a reminder, Mr. Kerkorian is our largest shareholder and also
just recently invested $50 million in MGM China."
Sean MacNeal, an analyst with InsiderScore.com, says, "The sale was
executed at $10.74 [a share] and the stock didn't hit that price that
day, so he sold at a discount. You never want to see a large
shareholder sell a chunk of shares at a discount, and it's possible it
was a cash-raising maneuver."
MacNeal also notes that after Tracinda's sale, two executives bought
into MGM for the first time, adding to their indirect holdings.
On Aug. 22, Chief Marketing Officer William Hornbuckle bought 20,000
shares for $184,000, an average of $9.22 each, and Chief Operating
Officer Corey Ian Sanders bought 10,000 shares for $97,400, an average
of $9.74 each. Sanders now indirectly owns 22,804 shares while
Hornbuckle indirectly owns 20,000 shares and directly owns 12,605
shares.
"It's the first time executives at MGM have bought in at least eight
years," says MacNeal. "Tracinda's sell was tough to swallow from a
shareholder standpoint from the discounted aspect, so execs stepping
up softens the blow."
MGM stock reached a 52-week intraday low of $8.92 on Aug. 31, 2010.
Shares climbed after that date, and on Jan. 18 reached a high of
$16.94. MGM stock has backed off since then, and trended closer to the
low, closing at $9.81 on Thursday.
On Aug. 9, Credit Suisse's director and senior gaming, lodging and
leisure analyst, Joel Simkins, remained cautious on MGM and maintained
it at Underperform while lowering the price target to $10 from $11
after MGM reported a strong second quarter.
In an interview with Barrons.com, Simkins says Credit Suisse is
cautious on MGM given its Vegas exposure. "Surprisingly trends in
Vegas have been pretty solid to date, but 30% of Vegas' room nights
come from conventions. We're concerned that there could be pullback.
"We currently favor regional casinos as people stay closer to home.
They can get on the local river boat, play $50 in the slot machine and
get dinner...especially with gas prices coming down," he says.
Credit Suisse makes a market in the securities of MGM.
http://online.barrons.com/article/SB50001424052702304121204576530831365940362.html?m od=BOL_hpp_oe