The Strip casino giant told shareholders the proposed name reflects the company's current vision and future growth. MGM Mirage, through its MGM Hospitality Division, has plans for nongaming hotel brands in several international markets, including China, India and the Middle East.
The company's first international venture was the MGM Grand Macau which opened in December 2007.
"MGM Resorts International better represents our company's growing global presence," company Chairman and Chief Executive Officer Jim Murren told employees this morning. "As a truly international company, our name should clearly reflect that.
"This is a significant step and we don't take it lightly," Murren said.
It also reflects what would happen if The Mirage were no longer part of MGM's casino collection. Now The Mirage's earnings actually held up fairly well in Q1 2010, especially compared to other MGM casinos. So in the short term losing Mirage makes no sense... But what about the long term?
Let's face it, both the sale of TI early last year and the opening of CityCenter late last year shifted MGM's center of gravity further south of Flamingo Road. With the exceptions of The Mirage and Circus Circus, all other MGM casinos are now south of Flamingo: Bellagio, Aria, Monte Carlo, New York New York, MGM Grand, Excalibur, Luxor, and Mandalay Bay.
MGM is also looking to possibly buy Cosmopolitan when it opens to integrate it into CityCenter. And in order to do this, MGM will need to raise capital... But can it?
And is more trouble on the way? Jim Cramer trashed MGM (while talking up Wynn Resorts in advance of Encore Macau opening tomorrow) yesterday on CNBC...
But Goldman Sachs (yes, them... And I'll get to them tomorrow.) likes what it's seeing with MGM Mirage.
Shares of MGM Mirage rose on Tuesday as a Goldman Sachs analyst said the casino operator's stock could move 25 percent higher on momentum in Las Vegas and strength in Macau.
Analyst Steven Kent said in a client note that competitors Las Vegas Sands Corp. and Wynn Resorts Ltd. will be reporting their first-quarter results shortly, with both likely to indicate that business is improving in Las Vegas and Macau remains solid.
Macau, the only place in China where gambling is legal, has reported strong gaming revenue gains since last summer. The same cannot be said for Las Vegas, which has been hindered by the housing downturn and economic slump. But signs are beginning to emerge that the U.S. economy is improving, which has led some consumers to increase their discretionary spending at casinos.
Kent anticipates that solid quarterly results from Las Vegas Sands and Wynn will boost investor confidence and bump MGM Mirage's stock higher.
The analyst added Las Vegas-based MGM Mirage to his Conviction Buy list, which indicates top stock picks.
So perhaps things are really looking up for MGM Mirage, possibly soon to be MGM Resorts International? Perhaps, so. No matter what they want to call themselves in the future, their future success depends on the return of consumer spending. And if consumers are feeling better enough about their personal finances to start spending again, MGM will be back.
I was talking about this on Twitter, but after the Daily Show completely exposed Cramer as a fraud in the market bust, I would not take him seriously at all.
ReplyDeleteI am not exactly the biggest MGM fan in the world, but I would actually do opposite of Cramer in most situations because he is obviously just a salesman and not a very good one.