Leisure Trouble at Home? Why This Investor Dumped $52 Million in MGM Stock
Key Points
New York City-based HG Vora Capital Management sold 1.5 million shares of MGM for an estimated $51.6 million in the third quarter.
The transaction value represented 7% of third-quarter 13F AUM at quarter-end.
The move marked a full exit from MGM.
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On Friday, New York City-based HG Vora Capital Management disclosed it sold out its entire MGM Resorts International (NYSE:MGM) stake in the third quarter, reflecting an estimated $51.6 million net position change.
What Happened
According to a filing with the Securities and Exchange Commission released on Friday, HG Vora Capital Management sold its entire holding of MGM Resorts International (NYSE:MGM) during the third quarter. The fund liquidated all 1.5 million shares it previously held, erasing a position valued at an estimated $51.6 million.
What Else to Know
Top holdings after the filing:
- NASDAQ: PENN: $139.6 million (18.9% of AUM)
- NASDAQ: CZR: $94.6 million (12.8% of AUM)
- NASDAQ: DRVN: $90.2 million (12.2% of AUM)
- NYSE: FAF: $65.9 million (8.9% of AUM)
- NYSE: R: $63.2 million (8.6% of AUM)
As of Friday, MGM shares were priced at $32.47, down 13% over the past year and lagging the S&P 500's nearly 15% return in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of market close Friday) | $32.47 |
| Market capitalization | $8.9 billion |
| Revenue (TTM) | $17.3 billion |
| Net income (TTM) | $69.7 million |
Company Snapshot
MGM Resorts International is a leading global operator of casino, hotel, and entertainment resorts, with a diversified portfolio spanning the U.S. and Macau. The company’s strategy emphasizes integrated resort experiences, combining gaming, hospitality, and entertainment to drive recurring revenue across multiple customer segments. MGM’s scale, brand recognition, and presence in premier gaming markets provide a competitive advantage in capturing both traditional and digital gaming demand. Key customers include premium gaming patrons, leisure travelers, business and convention guests, and online gaming participants.
Foolish Take
HG Vora’s decision to unwind its MGM position—and trim United Parks in the same quarter—signals a shift in how the fund is assessing optionality across the leisure sector. HG Vora typically targets companies trading at steep discounts with multiple catalysts to unlock value. Offloading two high-profile entertainment holdings suggests the margin of safety has tightened or that better opportunities exist elsewhere within the firm’s deeply concentrated book.
MGM’s latest results help explain the recalibration. Consolidated net revenue rose just 2% year over year to $4.3 billion due primarily to MGM China, and profitability weakened: Adjusted EBITDA fell to $506 million from $574 million, and the company recorded a $285 million net loss driven by a $256 million goodwill impairment tied to its Empire City decision.
Meanwhile, Las Vegas Strip EBITDAR dropped 18%, and adjusted EPS declined to $0.24 from $0.54. Bright spots remain—MGM China posted 17% revenue growth, and BetMGM raised its full-year guidance—but the near-term earnings picture is mixed.
Ultimately, MGM still has durable assets and strong digital momentum, but catalyst timing has grown less certain. For value-focused investors, clarity Las Vegas demand and the momentum in China will be important to watch for this stock.
Glossary
Exited position: When an investor sells all holdings of a particular security, reducing their ownership to zero.
13F AUM: Assets under management reported in a fund's quarterly SEC Form 13F, showing U.S.-listed equity holdings.
Liquidated: The process of selling off an investment position, often to exit a holding entirely.
Stake: The ownership interest or investment a fund or individual holds in a company.
Integrated resort: A property combining casino gaming, hotels, entertainment, dining, and other amenities under one operation.
iGaming: Online gambling activities, including casino games and sports betting, conducted over the internet.
Premium gaming patrons: High-value customers who wager large amounts at casinos, often receiving special services.
Quarterly report: A financial statement released every three months, detailing a company's performance and financial position.
Competitive advantage: A unique strength or position that allows a company to outperform its competitors.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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