MGM - MGM MIRAGE

[Tiptopptrader]

MGM MIRAGE, through its subsidiaries, owns and operates casino resorts in the United States. The company’s resorts offer gaming, hotel, dining, entertainment, retail, and other resort amenities. It also owns and operates golf courses and a golf club. As of September 30, 2008, the company’s properties consisted of 17 wholly-owned casino resorts and 50% investments in 4 other casino resorts. It has a strategic alliance with the Mashantucket Pequot Tribal Nation, which owns and operates Foxwoods Casino Resort in Ledyard, Connecticut. The company, formerly known as MGM Grand, Inc., was founded in 1986 and is based in Las Vegas, Nevada. MGM MIRAGE is a subsidiary of Tracinda Corporation.

FIRST LET ME SAY I am not quite ready to buy this one, as there is a possibility of bankruptcy in the near future. They have many hurdles to clear, 14 billion in debt, 1.3 billion dollars short to complete the Citycenter project, credit rating down, not to mention that gaming is down. This was a $100 stock in Oct of 2007. It closed today at 2.62. If they can overt bankruptcy this could be possible homerun, when gaming revenues are back up. They have earnings in about a week or so. (Dubai World does have a stake in the Citycenter project.)

LAS VEGAS (AP) -- MGM Mirage Inc., the gambling company owned by billionaire investor Kirk Kerkorian, said Tuesday that it may default on its debt amid development of its biggest casino project ever, the $8.6 billion CityCenter in Las Vegas.
http://finance.yahoo.com/news/MGM-Mi...-14535427.html

NEW YORK, March 3 (Reuters) - MGM Mirage (MGM.N), which is
thought to be close to violating terms in its bank loan
agreements, may have difficulty negotiating for more flexible
terms in the debt as language in its bonds could leave the
casino operator with little to offer its bank lenders.
Whether MGM is able to complete its planned Las Vegas Strip
CityCenter project with partner Dubai World may also be key to
bank lenders' willingness to give the company additional
flexibility.
http://www.reuters.com/article/marke...0090303?rpc=44

[Tiptopptrader]

It just keeps getting worse for MGM. Dropped to a interday low of 1.89.
0.41 (15.65%
Last Trade: 2.21

I don't know whether to buy or short it. LOL

NEW YORK, March 4 (Reuters) - MGM Mirage's (MGM.N) bond prices plunged and its debt protection costs jumped on Wednesday a day after the casino operator warned it may breach terms in its credit agreements this year if adverse economic conditions continue.
MGM said it is in talks with its bank lenders for a waiver on its loans or to amend the debts' covenants, but said there was no assurance that lenders will agree.
If the company is unable to amend terms or receive a waiver its bank lenders could accelerate repayment of the loans and, under certain circumstances, defaults on its other debt may be triggered, MGM said.
MGM's 6 percent bonds due 2009 dropped 12.5 cents to 47.5 cents on the dollar, according to MarketAxess.
The cost to insure the company's debt with credit default swaps jumped to 67 percent the sum insured as an upfront cost, or $6.7 million to insure $10 million for five years, plus annual payments of $500,000, from 64.5 percent upfront on Tuesday, according to Markit Intraday.
MGM, which has around $14 billion in debt including around $7 billion in bank loans, said its annual report is likely to contain a graph from its auditors about whether the company will be able "to continue as a going concern."
"We have no doubt the company is working on how it will 'cure' this potential covenant violation in such a way as to convince the auditors that the company is in fact a going concern for the audit test," Barbara Cappaert, analyst at KDP Investment Advisors, said on Wednesday in a report.
However, "asset sales may not be timely enough to convince the auditors the break could be averted. This is where the company's equity owners could play a pivotal role," she said.
Billionaire investor Kirk Kerkorian's Tracinda Corp is MGM's largest shareholder, with almost 54 percent of the company's shares.
Raising new equity to reduce leverage may be the best way for the company to avoid breaching its debt covenants, Cappaert said.
"If we are right and the company can raise equity in a timely matter, we think the bonds and the term loan could see a nice pop in price as uncertainty is lifted about the credit," she said.
Raising new equity would give MGM more room under its net leverage covenant, which is a measure of debt relative to assets.
If MGM uses proceeds from new equity to buy back debt at distressed prices it could also improve its leverage covenants, a measure of debt to earnings before interest, taxes, depreciation and amortization, she said.
MGM has $1.2 billion of bonds maturing this year and $1 billion due next year. (Reporting by Karen Brettell; editing by Leslie Adler)

http://www.reuters.com/article/marke...0090304?rpc=44

[madstal]

MGM Mirage (MGM) was downgraded by KeyBanc Capital. The stock is trading at a new low of $1.85.

[Tiptopptrader]

Originally Posted by madstal

MGM Mirage (MGM) was downgraded by KeyBanc Capital. The stock is trading at a new low of $1.85.

Closed today at 2.00, BUT here is my take.

They need 1.3 billion dollars to finish the Citycenter. I think they will secure the money. Then we will see a surge in share price. Earnings will be in a week or so. I expect earnings to be weak and the share price will go back down. They have alot of debt to contend with and gaming is down. They are going to pick up $775 million from the sale of the Treasure Island Hotel (end of March I think) I expect some other liquidations as they need to streamline their operation and infuse some cash. IMO.

We are talking about Kirk Kerkorian and Citycenter partner Dubai World. These people are not light weights. Dubai World has over 100 billion dollars in assets. Between these two giants, 1.3 billion should not be a problem. If they should go into bankruptcy, I am sure it would be a Chapter 11 and not seven. Because many of the MGM employess buy stock through payroll deduction, I would think that Kirk would keep their interest in mind.

It is still a VERY RISKY PLAY, but has homerun potential if they work their way back to a positive position.
(Earnings are due 3/9/09 - 3/19/09) (Which may change the order of events I commented on above)

[Tiptopptrader]

CityCenter and Cosmopolitan general contractor Perini Building Co. has asked building trades unions to take pay cuts and make other concessions as they work to complete the financially troubled projects, according to several sources familiar with the negotiations.
http://m.lasvegassun.com/news/2009/m...ion-givebacks/

Good luck on getting the Unions to take pay cuts. They did suspend bonuses, but they need to trim the inhouse Fatcats. They are big on cutting back on the common workforce, but now its time to look at all the suits just taking up space.

[MWM]

MGM coming back nicely here, I'm sitting on some April $5 calls...

[Norlan]

Originally Posted by MWM

MGM coming back nicely here, I'm sitting on some April $5 calls...

wtf is this? a dead cat bounce?

Sector Snap: Wynn Resorts, MGM price targets cut
March 9, 2009 1:09 PM ET
MGM will now hunt financing
Mon. March 09, 2009; Posted: 12:53 PM

not looking bright here, most likely meet the same fate as LVS, would get out if I were you...

[Tiptopptrader]

Originally Posted by MWM

MGM coming back nicely here, I'm sitting on some April $5 calls...

Down from the highs, but it could be Tracinda(Kirk) buying again, or financing is getting close.IMO

TRACINDA CORP - Nov and Dec 2008
30-Dec-08 *140,000 DPTR Purchase at $4.59 per share.
(Cost of $642,600)
29-Dec-08 *225,000 DPTR Purchase at $4.44 per share.
(Cost of $999,000)
26-Dec-08 *100,000 DPTR Purchase at $4.28 per share.
(Cost of $428,000)
24-Dec-08 *110,000 DPTR Purchase at $4.04 per share.
(Cost of $444,400)
23-Dec-08 *281,368 DPTR Purchase at $3.99 per share.
(Cost of $1,122,658)
4-Dec-08 *523,000 DPTR Purchase at $5.54 per share.
(Cost of $2,897,420)
3-Dec-08 *344,000 DPTR Purchase at $5.10 - $5.7 per share.
(Cost of about $1,858,000)
2-Dec-08 *233,000 DPTR Purchase at $4.62 per share.
(Cost of $1,076,460)
24-Nov-08 *600,000 DPTR Purchase at $5.59 per share.
(Cost of $3,354,000)
21-Nov-08 *680,000 DPTR Purchase at $4.45 per share.
(Cost of $3,026,000)
13-Nov-08 *500,000 DPTR Purchase at $5.58 per share.
(Cost of $2,790,000)
12-Nov-08 *600,000 DPTR Purchase at $5.63 per share.

[Mitzter]

Originally Posted by Tiptopptrader

I don't know whether to buy or short it. LOL

Then you'd better stay away from this one

[Tiptopptrader]

Last Trade: 2.64
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