MGM Stock

[kdollar]

I was reading an article about the new wynn resort (http://www.breitbart.com/article.php...show_article=1) and they mentioned how MGM's stock has lost 80% of its value this year. So I was thinking, it is right now $13.50 (http://finance.google.com/finance?client=ob&q=NYSE:MGM) ...Seems like when the economy gets going again and if online gambling is ever legalized that they would be a good pick. Since it is almost certain they would be a big part of online gambling in the US and it would most likely really help their bottom line.

I know nothing about stocks...so please feel free to tell me how dumb of an idea this would be to invest in them right now.

[MJ]

There is a huge risk of bankruptcies, buyouts, and mergers all of which could leave this stock diving to $2 or even zero - but I do see the benefit in taking a calculated gamble on it.

Personally, I say wait - the downturn has only started it's destined to head south some more.

[MJ]

I'm thinking this stock will slide after a period of holding, if it falls below $10 I'm buying in.

[PokerNations]

The MGM had been expanding until the durned economy took a nosedive. They recently built a new location at the Foxwoods casino in CT, making a deal with the Native tribe to have a property that was more upscale I believe.

Of course, that was also likely because the Pequots wanted to be able to branch out of CT into other locations by their association with MGM. But I believe further expansion plans are on the backburner for awhile given the state of things.

Still, savvy investors buy low and sell high. So definetely get in on the stuff while it's cheap I say!

[MJ]

Down .50 so far this morning, I think it will slide more and personally hope it falls below $10 so I can buy in

[MJ]

down to $10.49 since I posted, anyone else thinking about buying into this?

[resipsa]

There is a huge risk of bankruptcies, buyouts, and mergers all of which could leave this stock diving to $2 or even zero - but I do see the benefit in taking a calculated gamble on it.

Personally, I say wait - the downturn has only started it's destined to head south some more.

Bankruptcies - yes; but buyouts and mergers being a risk to stockholders? Usually being a target of a buyout or merger is a substantial benefit to stock holders as they usually get a substantial premium above market price (otherwise why would s/h vote to approve it?)

If anyone is considering investing in MGM I would strongly recommend doing some dilligence by looking into their City Center project. It may very well all work out beautifully, but there certainly is a lot of exposure there.

[MJ]

If anyone is considering investing in MGM I would strongly recommend doing some dilligence by looking into their City Center project. It may very well all work out beautifully, but there certainly is a lot of exposure there.

I think that is what makes this a classic gamble, if the City Center gets back on track and Vegas economy recovers this stock could sky rocket.

I have little to zero knowledge of investing, but shouldn't the exposure to any credit issues regarding city center already be factored into the price by now?

We're below $10 now, will be interesting to watch the next week - I personally won't do any buying until after the inauguration.

[resipsa]

I have little to zero knowledge of investing, but shouldn't the exposure to any credit issues regarding city center already be factored into the price by now?

Sure, if you beleive in efficient capital market theory than ALL public information is already priced into any stock. But the fact that a stock already has potential bad results priced in does not exactly make something safe. Just a simplistic example, but let's say you have a stock that has 10 equally possible outcomes a year from now. 9 of those outcomes involve the company going bust and the shareholders getting nothing, but 1 of those outcomes would have the value of the stock at $100. So what would be a fair price of the stock? about $10 (10% chance of it being worth $100). Granted that's an intentionally simplistic example, but that's a gamble not an investment.

[MJ]

Right, I called it a gamble repeatedly.

You clearly understand the market, I don't - but I'm still looking to gamble on MGM if it keeps droping