Amazon (NASDAQ:AMZN) is rumored to be in talks to acquire MGM — the movie studio, not the gaming company. But confusion over nearly similar company names sent MGM Resorts International (NYSE:MGM) stock soaring late Monday.
As the chart below indicates, bewildered traders sent shares of the largest operator on the Las Vegas Strip higher in today’s after-hours session, with the stock trading as high as $41. That put it within striking distance of the 52-week high of $42.74. Traders subsequently realized the gaffe and rapidly departed the gaming name, sending it back below $39 at this writing. Shares of MGM Resorts closed at $38.75 during normal trading hours.
The Information broke a story earlier this afternoon indicating Amazon is mulling a run at MGM – the movie studio – in what would be the e-commerce giant’s latest push into entertainment. The Hollywood company is well-known as the home to the James Bond franchise, but it has other coveted titles, including the Rocky Series, and owns the Epix channel. It also produces several cable and streaming shows, as well as popular reality fare, such as Shark Tank and Survivor.
As for MGM — the gaming company — even with the after-hours retreat, the casino behemoth is one of the better-performing large-cap gaming equities this year, with an admirable 23 percent gain.
The MGM’s Once Had Ties
There was a time when the Las Vegas and Hollywood sleeves of MGM were one.
In 1969, the late Kirk Kerkorian acquired 40 percent of studio Metro-Goldwyn-Mayer, later bringing the iconic brand to Sin City. That lead to the creation of corporate entities MGM Grand Inc., MGM Mirage and, ultimately, MGM Resorts International.
Tracinda Corp. — a holding company for Kerkorian’s estate for his two daughters — at one point owned 16.2 percent of the gaming company. That stake was pared in subsequent years, and was liquidated entirely in September 2019.
Last year, Kerkorian’s estate donated $4 million to MGM Resorts Employee Emergency Grant Fund, which was set up to assist workers displaced by the coronavirus pandemic.
Amazon, Gaming Speculation
Monday’s Wall Street gaffe aside, there has been some talk about Amazon eventually entering the wagering space. But it’s just speculation.
Much of that chatter is driven by the company holding an 11-year deal with the NFL to stream 15 games a year.
Amazon Web Services (AWS) — the world’s largest cloud computing outfit — is also the provider of next generation analytics and statistics to the NFL, prompting some talk the company could move into sports betting data at some point. But that’s just speculation, too.
The Seattle-based company hasn’t publicly commented on any plans to move into the casino or sports wagering businesses.
The post Amazon, MGM Studios Rumor Creates Confusion, Leads to Pop in MGM Resorts Stock appeared first on Casino.org.