Share of MGM International Resort (New York Stock Exchange: MGM) In Friday morning trading, the company’s stock price fell nearly 5% after the company announced its second-quarter financial report, which showed that due to the coronavirus pandemic, almost all revenue has evaporated.
For most of the quarter, casino resorts in the United States were completely closed and subject to strict travel restrictions in China, which resulted in MGM’s revenue of only $290 million, compared with $3.2 billion in the same period last year.
Its profit of $0.23 per share in the second quarter of 2019 turned into a loss of $1.52 per share this time.
How to do
Despite the low trading price of MGM Resorts’ shares, the resort operator’s financial situation remains sound. Although outstanding debt exceeds US$11 billion, there are still more than US$8 billion in liquidity.
The question remains, how long will the current situation last? Casinos in China have only been closed for 15 days, but strict restrictions on travel to and from Macau mean that few people are gambling. Over the past three months, more than 90% of total monthly gambling revenue has disappeared, and when the July figures are released, the situation may not be better.
MGM’s US casino opened in late May, but as it is not yet ready to flood consumers, MGM’s performance may continue to be affected in the next few quarters. However, the resort operator said that its long-term business foundation “remains unchanged.”