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An exclusive group of investors flocked to Napa Valley for the All In Liquidity Summit 2026 in early June. |
One session was a pitch contest – with top investors sharing their top investment idea. |
One of the favorite ideas wasn't a tech stock or a crypto play. |
It was a casino company: MGM Resorts (NYSE: MGM) |
The pitch came from Aaron Cowen, who runs a $4 billion fund called Suvretta Capital. He ran the equities desk at George Soros's fund and was chief investment officer for Steve Cohen at SAC. |
Let’s walk through the bullish case for MGM. |
Start with the floor. Barry Diller's People Inc. (Nasdaq: PPLI) — the company formerly known as IAC — already owns 26% of MGM. On June 1, Diller offered $48.30 a share in cash to buy the rest, valuing the company near $18 billion. He called the stock "wildly undervalued" and he's putting real money behind that view. |
Diller isn't a strategic buyer trying to fold MGM into an existing gaming company. He's a financial buyer who thinks it's cheap. |
The stock immediately traded above his offer. Investors are betting the offer isn’t rich enough – and another buyer could emerge. Stifel and Deutsche Bank both peg fair value around $55. The board is reviewing the offer. |
This offer seems to put a “floor” under the stock price. |
The core business alone is worth most of today's price. J.P. Morgan recently broke it down: |
· $27 a share for the Las Vegas and regional casinos |
· $11 for MGM's controlling stake in MGM China |
· $8 for the digital business |
· $46 per share total value |
Yet that number overlooks the upside potential with MGM. |
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First-quarter revenue hit a record $4.5 billion. The Las Vegas Strip grew for the first time in six quarters. MGM China holds over 16% market share in Macau. BetMGM is the online sportsbook and casino joint venture that lost money for years. It finally flipped to sustained profitability - targeting $500 million in EBITDA by 2027. |
MGM leadership thinks the stock is cheap. That’s why they’ve implemented an aggressive stock buyback program. |
Since 2021 — MGM has bought back approximately 50% of its stock. This means earnings per share climb even when revenue holds flat. Management funds it by selling off real estate to reduce the share count. |
Yet the biggest upside is in Japan. |
MGM holds the license for Japan's first and only approved casino. It’s a $10 billion integrated resort in Osaka, opening in 2030. MGM owns about 42.5% of the venture. Japan's gambling market is larger than Macau's, and Osaka sits within easy reach of Shanghai and Beijing. These are shorter trips than Macau or Singapore for the Chinese gamblers who drive the region. |
Management thinks the property throws off more than $2 billion in EBITDA, potentially from day one. J.P. Morgan, using a more conservative $1.5 billion, estimates Osaka alone could add about $31 a share once it opens. |
Today the market assigns it almost nothing. That’s because 2030 is beyond most investors' horizon. History says that will change as the opening date approaches. Consider what happened when Wynn opened in Macau. The stock market started pricing it in roughly three years before the casino opened. |
Another upside wild card is in Dubai. |
MGM has an operating resort there with 300,000 square feet of casino space already built. It’s sitting empty because gambling is illegal in Dubai today. Wynn is opening nearby in about two years. If Dubai ever legalizes, that space lights up and it's worth real money. If it doesn't, you've lost nothing. |
Here’s the bottom line. MGM has a hard floor around $48 with Diller's bid. The core business is worth roughly today's price on its own. The buyback is shrinking the share count every quarter. Osaka worth $30+ a share that the market hasn't priced. And Dubai is a free call option. |
That's why Aaron Cowen thinks MGM could easily be a $100 stock. And the shares could go to $150 if Japan and Dubai both come online. |
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Ian Wyatt
Editor, Daily Profit |
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