MGM Insiders, Including Murren, Rush to Support Sagging Stock

MGM Resorts International (NYSE:MGM) board directors and executives are stepping up to support a stock hammered by the coronavirus pandemic – one that’s off 60.51 percent over the past week and currently resides at its lowest levels since early 1999.

A slew of filings made with the Securities and Exchange Commission (SEC) Wednesday indicate company insiders are scooping up the gaming company’s shares, providing a catalyst for the downtrodden stock to surge about 26 percent (as of this writing) Thursday.

President and COO William Hornbuckle joined his boss in supporting the Luxor operator’s stock, buying more than 2,000 shares, according to a Form 4 filing with the SEC.

The filings emerged less than a week after MGM said it’s scrapping a $1.25 billion buyback plan because the stock plummeted through the lowest price at which the company committed to repurchase the shares.

Insider Buying Matters

Executive Vice President and Chief Accounting Officer Robert Selwood, Executive Vice President and General Counsel John McManus, and Atif Rafiq, President of Commercial and Growth, were among the other executives purchasing MGM stock.

Nearly all of MGM’s directors added to stakes in the gaming company. For example, Keith Meister of Corvex Management made modest purchases of the stock. Meister is widely viewed as one of the architects behind pushing the company to sell Strip real estate assets to unlock shareholder value, and his hedge fund is one of the largest institutional investors in the stock.

Paul Salem – the MGM director that made a splash last May buying more than $20 million worth of the stock – added to that position with the purchase of about 250 shares, according to the SEC.

Good Timing?

All told, 16 MGM board members and executives bought some stock in recent days, gobbling up a name that has been battered by the COVID-19 pandemic. Entering Thursday, shares of the Mirage operator were lower by 78.54 percent year-to-date.

Along with its rivals in Las Vegas, MGM is wrestling with the governor-mandated Nevada closure of all gaming properties for 30 days because of the coronavirus. The firm’s regional portfolio isn’t providing any support because all of those casinos have temporarily shuttered, too.

Looking to allay Wall Street concerns about liquidity, MGM recently tapped a $1.5 billion credit revolver to access more cash, and the company has $8.2 billion in capital from Strip real estate sales, giving it what Murren called its strongest balance sheet in decades.