MGM Lower Off Q1 Sales Miss, But Kept Afloat By REIT Spin-Off Speculation
Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.
MGM Resorts International (NYSE: MGM) shares were trading lower by $0.28 (1 percent) at $21.12 in Monday's session. Earlier in the day, the company posted a better-than-expected profit for EPS ($0.26 vs. $0.14 estimates), but missed on sales ($2.33 billion vs. $2.4 billion).
The issue was whacked last Wednesday (falling from $22.36 to $21.11) when Wynn Resorts, Limited (NASDAQ: WYNN) reported worse than expected earnings. However, it has been able to maintain a $20.77 to $21.73 range over the four trading sessions (including today).
What is keeping the shares from sharply declining is the company exploring a possible spin-off of its undervalued real estate assets into a REIT structure. In the past, the Street has looked favorably on these types of transactions.
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