Amazon, MGM Studios rumor accidentally push MGM Resorts stock soaring
Amazon is rumored to be in talks to buy MGM, the movie studio, not the gaming firm. But confusion sent MGM Resorts International stock soaring.
Confused traders sent shares of the largest operator on the Las Vegas Strip higher in Monday’s after-hours session, with the stock trading as high as $41. That push it within striking distance of the 52 week high of $42.74.
Traders subsequently realized the gaffe and rapidly departed the gaming name, sending it back below $39. Shares of MGM Resorts closed at $38.75 during normal trading hours.
According to the Information, Amazon is mulling to buy MGM, the movie studio, in what would be the e-commerce giant’s latest push into entertainment. The Hollywood company is well-known as the home to the James Bond franchise. It also produces several cable and streaming shows, as well as popular reality fare.
As for MGM, the gaming firm, even with the after-hours retreat, the casino giant is one of the better-performing large-cap gaming equities this year, with 23% gain.
There’s a time when the Vegas and Hollywood sleeves of MGM were one
In 1969, the late Kirk Kerkorian bought 40% of studio Metro-Goldwyn-Mayer, later bringing the iconic brand to Sin City. That lead to the creation of corporate entities MGM Grand Inc., MGM Mirage and, ultimately, MGM Resorts International.
Tracinda Corp., a holding company for Kerkorian’s estate for his two daughters, at one point owned 16.2% of the gaming firm. That stake was pared in subsequent years, and was liquidated entirely in September 2019.
In 2020, Kerkorian’s estate donated $4 million to MGM Resorts Employee Emergency Grant Fund, which was set up to assist workers displaced by the pandemic.
The speculation of Amazon entering wagering space
There has been some talk about Amazon eventually entering the gaming space. But it’s just speculation. Much of that chatter is driven by the company holding an 11 year deal with the NFL to stream 15 games a year.
Amazon Web Services, the world’s largest cloud computing outfit, is also the provider of next generation analytics and statistics to the NFL, prompting some talk the company could move into sports betting data at some point.
However, Amazon hasn’t publicly commented on any plans to move into the casino or sports betting businesses.
Editing by Rachel Hu