This story was originally published here.
Like so many gaming names, MGM Resorts (NYSE:MGM) is one of notable redemption stories in the novel coronavirus reopening trade as MGM stock is higher by 40% for the month ending June 10.
As the largest operator on the Las Vegas Strip, MGM is highly levered to the U.S. economy escaping the grip of Covid-19. Last weekend, the company restarted the Bellagio, MGM Grand and New York New York on the Strip. Excalibur joined the fold on June 11 and demand is robust following a more than two-month shutdown.
MGM said earlier this week it will reopen the Luxor and The Shoppes at Mandalay Bay later this month with ARIA and the Four Seasons at Mandalay Bay welcoming players back on July 1.
In addition to Nevada, MGM runs integrated resorts in Maryland, Massachusetts, Michigan, Mississippi, New Jersey, New York and Ohio. To strong demand, the Mississippi properties restarted last month while the company’s Maryland, Michigan and Ohio venues are slated to be back online later this month.
All of that amounts to good news for MGM. After all, running casinos is a cost-intensive business and many of those costs are fixed, meaning operators are shelling out upward of millions of dollars per property on a daily basis, regardless of whether or not the property is up and running.
Second Wave Jitters
Somewhat lost in all reopening ebullience and political commotion that’s commanding so many headlines these days is that, unfortunately, the coronavirus is still with us and there still isn’t a cure or a vaccine ready to treat patients.
Although bars, casinos, restaurants and other leisure destinations are reopening with new health and safety protocols, and at limited capacity, with so many people trying to get back to their pre-virus lives, relevant fears about a second wave of Covid-19 cases are increasing.
In a Today Show interview, Dr. Ashish Jha, director of the Harvard Global Health Institute, said it’s possible that if a second wave of coronavirus cases hits, the U.S. death toll from the respiratory illness could hit 200,000 by September. A major problem for MGM and other gaming equities is that data suggests virus cases are increasing in some of the states that either did not shutdown or were among the first to reopen.
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