Robinhooders Got Paid Today On MGM
There's a Robinhood investing tracking that keeps track of the most popular stocks among its users. That list includes Eastman Kodak, which many took a "L" on, Nikola which might be a good move longer term and MGM International, in which they got a handsome payday today.
MGM Resorts International, through its subsidiaries, owns and operates integrated casino, hotel, and entertainment resorts in the United States and Macau. The company operates through three segments: Las Vegas Strip Resorts, Regional Operations, and MGM China. Its casino resorts offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. The company's casino operations include slots.
In the month of July, gambling revenue numbers out of Macao were fell another 94%, suggesting the casino sector in Macao recovery was far from over. But MGM isn't waiting around and they take look to take advantage of their cashflow and to build out a national sports gambling platform. MGM already has a digital gambling app and already has partnerships with Major League Baseball, the National Hockey League and the National Basketball Association.
And today, the company got some additional financial backing to make their nationwide gambling app a reality.
Shares of casino stocks marched higher in trading Monday after it was announced that some restrictions on travel to Macao are being lifted.
As for MGM Resorts, it will benefit from more business in Macao, but the bigger news was IAC/InterActiveCorp announcing a 12% stake in the gambling company. The company's chairman, Barry Diller, said he thinks that online gambling is going to be a huge opportunity and MGM has the potential to be a big player.
Investors may be surprised to learn that MGM is already one of the biggest online gambling companies in the U.S., with the BetMGM app and its casinos and sportsbooks. The online gambling business is still a fragmented business right now, but MGM has the opportunity to leverage its brand to grow in the segment, and that's one reason Diller sees so much upside.
Now personally, I don't know how the Robinhooders trade, maybe they saw a cheap stock with the potential to rise over time once we defeat COVID-19. Maybe they were breathing a sign of relief after MGM popped to make up their loses in Kodak and other stocks. But had you been following the Smart Money, you would of knew something was bound to happen within the next couple of weeks. Just look at the open interest in the options chain. The open interest in the calls dwarfs the open interests in the puts.
Open Interest In Call Options Expiring On Aug 21.
Open Interest In Put Options Expiring On Aug. 21.
Hopefully the Robinhooders take some profits off the table because I can assure you the Smart Money did.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Posted Using LeoFinance
