The deadliest mass shooting in modern U.S. history had an immediate effect on the stock market, with MGM Resorts International (MGM) losing over $900 million in market cap (to $17.8 billion); with shares down nearly 6% (to $30.87) at the close of trading on Tuesday. The Mandalay Bay Casino, operated by MGM, is the site where shooter Stephen Paddock opened fire. With 13 properties (accounting for 57% of revenue) on the Las Vegas strip, MGM is the most exposed Sin City casino operator should tourists decide to stay away from Vegas in the wake of the tragedy. MGM shares were up 19% over the last 12 months prior to Sunday night’s massacre.
Howie Long-Short: The horrific news out of Las Vegas drove down MGM share prices, but MGM China Holdings’ announcement that the company is delaying the opening of its new hotel in Macau, from late ’17 to early ’18, certainly didn’t help. Damage from Typhoon Hato in August has been cited as the cause for the delay. Casino shares typically see a bump around a new opening and with the company banking on Asia for future growth, short-term investors were likely dismayed by the news.
Fan Marino: Shares of American Outdoor Brands (AOBC), formerly Smith & Wesson, and Sturm Ruger (RGR) are up 5.7% and 5.6%, respectively (at the close on Tuesday, from the close on Friday 9/29). Gun stocks typically rise following a mass shooting, as investors expect sales to spike amid discussion of gun restrictions. It’s disturbing to consider that there have been enough mass shootings in recent U.S. history to formulate predictive trends. JWS isn’t a political forum, but we should all be able to agree that there is no reason for a civilian to own a weapon capable of firing 400 bullets/minute.