Shares of Boyd Gaming (BYD 2.77%) jumped a whopping 28.1% in May, according to data provided by S&P Global Market Intelligence, as casinos across the U.S. moved closer to reopening. In June, shares are already up another 15.2%, although they are still down 17.7% so far in 2020.
Boyd Gaming benefited from a rising market in May and the fact that gambling stocks are generally more volatile, therefore magnifying the market's moves. But it had some positive developments on its own.
A total of $600 million of senior notes due in 2025 were sold to investors at 8.625% interest, a high rate but cash that may be necessary to survive the current crisis. Management also started announcing mid-month that it was going to reopen resorts.
Investors in gambling stocks have been wondering how companies are going to survive the COVID-19 shutdowns and what their businesses will look like when reopened. Boyd raised enough money to survive for the foreseeable future, and with most casinos now open, we'll see what that recovery looks like.
Investors shouldn't expect gamblers to rush back to slot machines and table games, but a slow and steady pickup in business would be welcome news for a consumer discretionary stock like Boyd Gaming.