L&B has a new video out on MGM.
Topics addressed in the video include:
- MGM’s Underperformance – The Company has underperformed its peer group by 453% since Jim Murren became Chairman and CEO in 20081. Over these seven years MGM has incurred numerous impairment losses, while its peers have prospered in comparison.
- May Be Repeating the Same Mistakes – MGM has a track record of bad capital allocation decisions that have hurt shareholders, in our view, with the CityCenter development the most striking, but not only, example reflected in the $2 billion of impairments the Company has recorded unrelated to CityCenter since 2009 (e.g. land on Renaissance Pointe in Atlantic City). Even though this highly leveraged approach had the Company teetering on the brink of bankruptcy in 2009, MGM is currently driving debt levels even higher as it undertakes $5 billion in new developments.
- The Safe Bet to Fix MGM – The 2015 election of directors presents a fresh choice. Land and Buildings has put together a slate of new director nominees who we believe have the expertise needed to fix MGM:
- Matt Hart, former President and COO at Hilton Hotels Corporation
- Richard Kincaid, former CEO of Equity Office Properties Trust
- Mark Weisman, former CFO of Oppenheimer
- Jonathan Litt, the Founder and CIO of Land and Buildings