MGM stock plunges as Las Vegas business struggles

MGM Resorts International has experienced a decline in its Las Vegas business, contributing to a significant loss in market value. This downturn, noted during the latest quarterly results, is attributed mainly to the impacts of ongoing room remodels at the MGM Grand, along with decreased performance in table gaming. Although these factors have negatively affected results, MGM is also seeing some positive growth in its international operations and digital segments. Over the last week alone, the company witnessed a drop of nearly $926 million in market capitalization, bringing it to around $9.8 billion. Despite the downturn, the stock remains 3.8% above its 2024 end value, though its performance has been relatively lackluster compared to the S&P 500, which recorded an 11.1% return year-to-date. Investors appear concerned about the stock's current losing streak, which could either indicate deeper vulnerabilities or present a potential buying opportunity depending on future fundamentals. The overall sentiment surrounding MGM seems to reflect anxiety, especially as past similar scenarios have prompted discussions around whether declines are short-lived or foreshadow further challenges in the company's performance. The risk associated with sustained weakness is recognized as a potential warning sign, leading many investors to reconsider their positions amidst this instability. Analysis shows that, historically, these downturns can reflect broader economic shifts or adjustments to market expectations, leading to uncertain future trajectories for the company.