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As turmoil surrounds Macau's biggest casino company, word came down late last week that one of the quiet forces that shaped Las Vegas may be willing to get out of gambling as well.
Kirk Kerkorian, the largest shareholder in MGM Resorts (NYSE: MGM ) , may be willing to sell his stake in the company he helped build. Since he announced the sale of 32 million shares in October, it has become more apparent that MGM is no longer the crown jewel he thought it was.
The average gambler may not know Kerkorian, but investors should remember him for his role in building MGM into a power in Las Vegas. He played a pivotal role in the Mirage Resorts purchase, when MGM bought Steve Wynn's resort company.
The loss of Kerkorian wouldn't change the day-to-day operation of MGM, but it makes me question the stock even more. If someone with knowledge of the inner workings of MGM wants out, why should I want in? And like the transition of Stanley Ho out of Macau's SJM, the loss of Kerkorian leaves more voices to fight for power. But Kerkorian's sale would be a cakewalk compared with Ho's succession plan.
The fight for SJM continues
It doesn't appear the fight for SJM, Stanley Ho's casino company, will be resolved any time soon. In the past week, we've heard reports of a transfer of ownership, Ho filing a lawsuit against his own family, a television appearance by Ho saying everything is fine, and now there are reports that the suit will continue.
The bottom line for investors in Wynn Resorts (Nasdaq: WYNN ) , Las Vegas Sands (NYSE: LVS ) and Melco Crown (Nasdaq: MPEL ) is that the longer this strings out, the better. Any disruption in operations or guests choosing to stay away from the family feud will only drive them to other resorts.
If reports that Ho wants to split his empire evenly between his children are true, I still think a gradual breakup of assets will occur. If it does, Wynn, Las Vegas Sands, Melco, and MGM will all stand to gain.
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