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MGM Resorts (MGM) Withdraws $1.25-Million Share Buyback Plan

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The world economy is grappling with the spread of the novel coronavirus. The U.S. gaming industry is witnessing unforeseen and unprecedented market volatility. Due to COVID-19 distress, MGM Resorts International (MGM - Free Report) announced the termination of its previously announced modified Dutch auction tender offer.

As a result of this termination, the company withdrew the purchase of $1,250,000,000 issued and outstanding shares of its common stock. Following this termination, no shares will be purchased in the tender offer, and all shares previously tendered and not withdrawn will be returned to tendering holders.

Chairman and CEO of MGM Resorts, Jim Murren said “As a result of the unforeseen and unprecedented volatility in the financial markets due to coronavirus, and the resulting impact on our ability to determine and maintain an offering price range, we have decided to terminate the tender offer,”

Coronavirus to Hurt Results

Near-term prospects of the company are likely to get affected due to increased cancellations in hotel and convention bookings in Las Vegas, particularly during the months of March and April. Also, MGM China continues to be impacted by low visitation, following the 15-day closure of its Macau properties.

Moreover, the company has withdrawn 2020 outlook due to the coronavirus outbreak and market-wide weakness in Far East baccarat in Las Vegas. So far this year, shares of the company have declined 51.2%, the industry has decreased 41.9%, while the S&P 500 has plummeted 18.8%.

Zacks Rank

MGM, which share space with Boyd Gaming Corp. (BYD - Free Report) , Las Vegas Sands Corp. (LVS - Free Report) and Penn National Gaming, Inc. (PENN - Free Report) in the industry, currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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