MGM Mirage Up 15.9% As Going Concern Doubt Removed
June 24 2009 - 11:36AM
Dow Jones News
MGM Mirage (MGM) shares are sharply higher in early trading
Wednesday after the company removed a bankruptcy concern statement
from a filing.
The company said Tuesday there is no longer "substantial doubt"
about its ability to remain operational, after its offering of $2.6
billion in stock and debt. It will now be able to retire its
short-term debt, which was the source of concern about the
company's status.
Shares recently changed hands at $6.75, up nearly 16%. While the
shares have more than doubled over the past three months, they
remain down around 82% over the last year.
Robert LaFleur, an analyst at Susquehanna Financial Group, said
the news shouldn't come as a surprise, adding that the company has
enough cash to meet its obligations in 2010. The statement about
the company's going concerns was a "big drag on the stock" over the
past several months, he said, but he was surprised by the market's
strong reaction to the news.
"Anybody who's done their homework should have seen this one
coming," he said.
But the real test for MGM will come in 2011, he said, when the
company faces paying off a bigger credit line.
-By Alexandra Scaggs, Dow Jones Newswires; 212-416-2673;
Alexandra.Scaggs@dowjones.com