XRTrader

Loss Vegas: Short MGM

Just as a follow-up, this ending up being a good call, at least over the short-intermediate term:

At article date (Sept 21, 2009) : MGM hit 13.50
Yesterday close, (Dec 10, 2009) : MGM closed at 9.66

You hit 11.88, could still hold for 9.33 based on chart, although i closed my position.

So, nearly a 40%+ short profit. Nice call. Altho i happen to be long long term MGM (in at $3, with time horizon of 5 yrs), i used your call to hedge by selling $15 calls, not quite as profitable as your outright short, but good enough.

Thanks again!

Wynn, Casinos Freefall Continues

Re MGM and LVS, these stocks are currently a play on the credit market; if credit loosens enough for these companies to refi debt, they (i.e. the common stock) will survive long enough to profit from the vegas recovery. Meanwhile, i agree with some of the posts above that if/when the credit issues work out in their favor, these stocks will be back in the low double digits.

Meanwhile, it's also interesting that both these company's futures depend largely on what their majority holders (adelson and krekorian) will do. Looking into their finances provides some interesting info on how long/if they can/will provide these companies credit.

disclosure: long MGM and LVS calls 2011