MGM Resorts International

MGM Resorts International is a global gaming and entertainment company that operates a diverse portfolio of 30 unique hotel and destination resorts featuring best-in-class casinos, meeting spaces, and live entertainment. The company's performance in the second quarter of 2026 was bolstered by record results on the Las Vegas Strip, where high-end leisure demand remained resilient and convention room-night mix increased to approximately 20%. Growth was further supported by MGM China, which maintained a strong 17% mass market share and benefited from robust premium gaming volumes in Macau. The stock's outperformance was significantly enhanced by a June 1, 2026, non-binding proposal from People Incorporated to acquire all outstanding shares of MGM for $48.30 per share in cash, injecting a 15% acquisition premium into the stock's valuation.

MGM Resorts International is a global gaming and entertainment company that operates a diverse portfolio of 30 unique hotel and destination resorts featuring best-in-class casinos, meeting spaces, and live entertainment. The company's performance in the second quarter of 2026 was bolstered by record results on the Las Vegas Strip, where high-end leisure demand remained resilient and convention room-night mix increased to approximately 20%. Growth was further bolstered by MGM China, which maintained a strong 17% mass market share and benefited from robust premium gaming volumes in Macau.

MGM Resorts has shown positive momentum with Las Vegas revenues growing for the first time in almost two years, driven by a strong convention calendar. The recent bid from People Inc. for control of MGM is seen as a potential avenue for value realization, and the company's performance has been bolstered by the strategic decision to streamline operations. Additionally, the move of inferior peer Caesars to go private could create further advantages for MGM, enhancing its competitive position in the market.

MGM Resorts is the leading omnichannel casino operator in the US, operating over 40% of casinos on the Las Vegas Strip. While macroeconomic concerns persist and Las Vegas demand remains below pre-COVID levels, we believe the current valuation presents an attractive long-term opportunity. We view the growth potential for the company’s online betting platform, BetMGM, and the development of Japan’s first integrated casino resort as positives.

MGM Resorts continues to report strong quarterly results, which the market has recognized this quarter, unlike in previous quarters when results went unappreciated. The company is also one of our larger share repurchasers in the portfolio, indicating confidence in its value. We anticipate further simplification and value realization from MGM. Additionally, we believe that recession fears are overstated, especially considering MGM's stronger financial position today compared to the past.