MGM Massachusetts Gaming License Win Not Reflected In Stock Value

Thursday, June 12, 2014, Morgan Stanley saw no value in

stock, after news of the resort's recent opportunity to obtain a gaming license from the Massachusetts Gaming Commission was possible for MGM's $800 million property in Springfield. Though the decision to award MGM the license will not likely be "officially issued" until the current threat of repeal is resolved, which is expected to be today or tomorrow, MGM will be responsible for an $85 million one-time licensing fee, a $18 million slot machine fee, as well as other fees and assessments. Morgan Stanley analyst Thomas Allen sees $800 million property to generate $447 million in revenue and $160 million of EBITDA. Allen continued to comment that this property, which is expected to be operating in 2017, will add to his $40 bull case and does not believe the stock currently reflects any value from Massachusetts. MGM shares closed yesterday at 24.52 and rose 1.55 percent in after-trading hours at 4:02PM EDT.