Diller’s IAC bolsters its MGM stake with $37m share deal

• IAC recently boosted its MGM stake by one million shares
• Barry Diller’s company already owned about 23% of the casino giant
• The two latest transactions cost a combined $37.22 million

Barry Diller’s IAC/InterActiveCorp (NASDAQ: IAC) recently upped its stake in MGM Resorts International (NYSE: MGM), the largest casino operator on the Las Vegas Strip.

A recent Form 4 filing from the U.S. Securities and Exchange Commission (SEC) indicates that on March 23, IAC bought 550,000 shares of the Cosmopolitan operator. The following day, Diller’s company, already the largest MGM shareholder, bought another 450,000 shares of the gaming stock.

With those two purchases, which cost a total of $37.22 million, IAC owns of 66.82 million shares of MGM, or more than 23% of the casino operator.

To its credit, MGM climbed 3.56% this month while the S&P 500 slipped 5.27%. Year-to-date, the gaming stock is up 1.37% while the S&P 500 is lower by 4.65%.

IAC a Long-Term MGM Investor

IAC initially took a 12% stake in MGM, then valued at $1 billion, in August 2020, but through a combination of additions and the gaming company shrinking its float via buybacks, the conglomerate’s stake has nearly doubled since then.

Diller has been publicly supportive of MGM, calling it a “forever asset” and there’s belief among sell-side analysts covering the media conglomerate that the in-house view is that MGM is undervalued.

However, there are also unsubstantiated rumors in investing and casino industry circles that Diller has privately expressed frustration with the performance of MGM shares, but he hasn’t publicly commented to that effect.

Diller and former IAC CEO Joey Levin are members of MGM’s board of directors.

Diller True to His Word on MGM

The aforementioned SEC filing emerged 13 months after Diller noted IAC could consider boosting its MGM investment, indicating the media mogul made good on his word to possibly add to a stock he once compared to a Patek Philippe watch.

There are no other gaming companies under the IAC umbrella, but reports surfaced last year indicating the company has evaluated other deals in the wagering space. IAC and MGM don’t have an exclusivity agreement that prohibits Diller’s company from exploring other transactions in the live betting space.

Shares of MGM aren’t the only recent Diller purchase. He just scooped up the penthouse at the Carlyle Hotel in Manhattan, once a stomping ground for President John F. Kennedy, for a cool $11 million.