MGM MIRAGE is engaged in gaming and resort operations. The Company owns and operates casino resorts, which includes offering gaming, hotel, dining, entertainment, retail and other resort amenities. As of December 31, 2008, the Company’s operations consisted of 17 wholly owned casino resorts and 50% investments in four other casino resorts. The Company owns and operates casino resorts in Las Vegas, Nevada, which include Bellagio, MGM Grand Las Vegas, Mandalay Bay, The Mirage, Luxor, Treasure Island (NYSE:TI), New York-New York, Excalibur, Monte Carlo, Circus Circus Las Vegas and Slots-A-Fun. Other operations include Circus Circus Reno and Silver Legacy (50% owned) in Reno, Nevada; Gold Strike in Jean, Nevada; Railroad Pass in Henderson, Nevada; MGM Grand Detroit; Beau Rivage in Biloxi, Mississippi and Gold Strike Tunica in Tunica, Mississippi; Borgata (50% owned) in Atlantic City, New Jersey; Grand Victoria (50% owned) in Elgin, Illinois, and MGM Grand Macau (50% owned).
Like others in the Casino business MGM Mirage has seen falling profits over the last year, however that trend is now reversing, the Centrecentre project is the largest ever private development undertaken in the United States and very nearly brought down the company. The units, originally priced from $500,000 to just over $9 million, came on the market in early 2007 — when the real estate market was still booming and big gamblers and Vegas executives were willing to place deposits on top-dollar units in the planned luxury towers.
Casino operator MGM originally expected to take in $2.6 billion from the condo sales. The company has collected about $300 million in deposits on 1,300 units, but those buyers have since balked at following through on the sales.
The company has now dropped those prices by 30% and this is expected to see MGM clear up the project with a tidy profit.The 67-acre complex of casinos, hotels, condominiums and shops will begin a phased opening on the Las Vegas Strip in December adding further to the MGM cash flow.
Ebeling Heffernan has raised the 2010 price target on MGM to $24.50
Disclosure: Long MGM