Heisenberg
Stock Chartist, Long/Short Ideas
MGM Resorts looks due for a bounce after falling nine weeks in a row, something it has done only once in 38 years, at the financial-crisis lows, and never ten. It has retraced much of the takeover bid from a couple of months ago and now trades about 13% below the $48.30 offer price, with RSI getting oversold. A higher bid is even possible. x.comÂ
MGM Resorts could respond to a dropped buyout bid with an aggressive buyback before the market sizes its Japan opportunity. The stock fell after the buyout bid was withdrawn, though the deal never made much sense. A $2 billion buyback, about 20-25% of shares outstanding, would not be surprising and could move the needle. x.comÂ
Barry Diller's non-binding ~$48-a-share offer for MGM Resorts via People Inc. is likely meant to put the assets in play and force a revaluation of a business Diller has repeatedly called significantly undervalued. Suvretta Capital puts base-case value near $60 a share on current assets alone, excluding the Osaka casino and Dubai licence optionality. The board, reviewing the offer, which has no expiry, is expected to reject it; the stock could then fall toward its pre-bid level near $37. x.comÂ
MGM Resorts' debt and operating leverage make its low free-cash-flow yield risky. A recession would make the situation very bad even if conditions otherwise look fine, and Diller is following the Liberty levered-buyback model. x.com x.com x.comÂ
People Inc. shareholders should get a high premium if MGM Resorts pursues a takeover. People Inc. first offered $48.30 a share for MGM, which rejected it; now, per the Wall Street Journal, MGM is considering acquiring People Inc. itself. Barry Diller's bid set a clever price anchor for his life's work, making a high premium the only logical outcome. x.comÂ
Wynn Resorts is undervalued against its luxury assets and cash generation, with a potentially transformational UAE resort ahead. Its $7.6B market cap compares with $2.3B of LTM adjusted property EBITDAR and over $2B of cash and investments. Wynn Al Marjan Island, opening September 2027, targets about $345M of steady-state EBITDAR, roughly 15% of today's base, in a market with little gaming competition. Risks are heavy debt, cyclical gaming, Macau regulation and UAE execution. x.com x.com x.com … Show more
Disney is a far better buy than MGM Resorts: Disney is a very inexpensive stock with irreplaceable assets, and Toy Story 5 is set to crush it for the company. x.comÂ
Wynn Resorts' high-end positioning makes it far less exposed to a Las Vegas downturn than mass-market casino operators. The Wynn brand caters to the top 1%, so a downturn hits it about as much as it hits Rolls-Royce. Wynn Palace in Macau is not a mass-market property either. x.com x.comÂ
Red Rock Resorts may be worth a bet off the Las Vegas Strip, with consensus forecasting 69% free cash flow growth in 2027 and 2028. Brothers Frank and Lorenzo Fertitta are its largest beneficial owners, with 90.3% combined voting power, so the founding family remains firmly in control. x.com x.comÂ
