Gaming Stocks and Global Markets Crash Amid Coronavirus Fears, MGM CEO Jim Murren Wins Big
Posted on: February 24, 2020, 11:04h.
Last updated on: February 24, 2020, 11:29h.
Share prices of gaming stocks tumbled with global markets on Monday, as a surge in the number of confirmed COVID-19 virus cases continues to spread across Asia, the Middle East, and Europe.
The week kicked off with a global sell-off, as investors are becoming increasingly worried regarding the deadly virus that is responsible for at least 2,627 deaths.
Germany’s DAX slid four percent and Italy’s benchmark index fell nearly six percent. In Asia, South Korea’s Kospi shed 3.9 percent, while Hong Kong’s Hang Seng was down 1.8 percent. Japan’s Nikkei was closed for a holiday.
In the US, the Dow Jones Industrial Average was down more than 1,000 points (3.64 percent) Monday afternoon. The NASDAQ was down 358 points (-3.74 percent), and S&P 500 down 110 points (-3.3 percent).
Publicly traded casino operators were, of course, not immune to the sell-off, and those companies operating in China’s Macau were hit hardest. As of 2 pm ET, Las Vegas Sands was down 4.2 percent, Wynn Resorts 4.6 percent, MGM Resorts 5.9 percent, Melco Resorts 3.6 percent, and Galaxy Entertainment 10.2 percent.
Murren Wins Big
All major US casino operators not in Macau were also in the red Monday. Caesars dropped 2.8 percent, Penn National 4.4 percent, Eldorado 6.7 percent, and Boyd 7.2 percent.
While investors panicked Monday, MGM Resorts CEO Jim Murren saved a bunch of cash by selling a significant portion of his MGM stock last week. According to the Securities and Exchange Commission (SEC) filings, the chief executive disposed of 689,000 shares of MGM at an average price of $32.16.
With each share losing $1.88 as of Monday afternoon, Murren’s timely sell-off means he avoided losses of $1.29 million.
The CEO, who announced his resignation earlier this month, will receive an outgoing compensation package totaling more than $30 million.
Not a Pandemic
South Korea is now on its highest alert level for infectious diseases. Italy reported a spike in cases of the new coronavirus that originated in Wuhan, China, and the disease has now spread to the Middle East, including Iran, Iraq, and Kuwait.
Venice canceled its famed annual Carnival festival, and numerous countries have closed their borders. Despite the global fears and tumbling stock markets, the World Health Organization (WHO) said Monday that COVID-19 is still not at a level that warrants the use of the term “pandemic.”
For the moment, we are not witnessing the uncontained global spread of this coronavirus, and we are not witnessing large-scale severe disease or death,” WHO Director General Tedros Adhanom said. “What we see are epidemics in different parts of the world, affecting countries in different ways and requiring a tailored response.”
WHO officials said during their Monday briefing that the world must be prepared for an outbreak.
“All countries must do everything to be prepared,” said UN Secretary General Antonio Guterres. “They must do everything to contain the disease.”
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