What happened
Most stocks had a Friday to forget, but MGM Resorts International (MGM +1.54%) endured a particularly awful trading session. The veteran casino and hotel operator's shares took a more than 7% hit on the day, which was notably worse than the 2.9% drop of the sinking S&P 500 index. Investors were clearly displeased by news of the company's latest asset divestment.
So what
After market hours on Thursday, MGM announced that it has agreed to sell the operations of Mississippi casino Gold Strike Tunica to privately held Cherokee Nation Entertainment Gaming Holdings. The price is $450 million, which will be transacted entirely in cash.
MGM won't end up getting that full amount. The company said that after taxes and fees connected with the deal, its final take will be around $350 million.
Like its rival Caesars Entertainment, MGM is in the process of adjusting its portfolio to find the right blend of casinos and resorts for its business. Less than a month ago, for instance, it closed its more than $1.6 billion purchase of higher-end resort The Cosmopolitan of Las Vegas located on the gambling mecca's fabled Strip.
In MGM's press release on the latest deal, CFO Jonathan Halkyard said that the Gold Strike sale "is a great outcome for the company as we are able to reprioritize future capital expenditures toward opportunities that will enhance the customer experience at our other locations."
NYSE: MGM
Key Data Points
Now what
Investors might be concerned that MGM is letting go of an asset that's more valuable than what it was sold for. According to the company, Gold Strike posted net income of just over $81 million in 2021.
MGM isn't entirely abandoning Mississippi. The company will continue to operate the Beau Rivage property there, which it describes as a "leading, world-class resort and casino."
