MGM and CZR - Why did they pop today?

I noticed that shares of MGM and CZR jumped today like a dog on an electrified manhole cover. What news is moving these two and will it last?

Yesterday's price was too low. Even at today's $7.31, it's still a buy.

Quote: s2dbaker

I noticed that shares of MGM and CZR jumped today like a dog on an electrified manhole cover. What news is moving these two and will it last?

Yeah, as I am currently long MGM, I was excited but also confused. The Google finance page has a list of related stories, and usually when there is a big jump like this one of the news stories will offer some indication, but in this case it's pretty bland. It looks like they're restructuring some debt and issuing some bonds, selling some others...I don't really understand financial stuff (clearly I should be investing in individual companies!).

The only other news from today is they were approved to buy some property in Springfield, MA, near the proposed site of their proposed casino. It was a small bit of land not crucial to the plan, and they still aren't guaranteed to get the casino deal (Penn is still in the mix), although I think they're the favorites at this point. Doesn't seem like big enough news for a 10% jump.

Anyway, very mysterious indeed. Only 5.8% down on my MGM holdings now :)

I had no idea CZR had jumped too. Still not touching that one.

I did so well in the last few weeks (other gaming stocks, not MGM or CZR), I'm all cash for the rest of the year to lock in my profit.

I sold last week though. I have absolutely no idea why these two stocks could be rebounding.

Just a wild ass guess, maybe something related to real-estate speculation...

Here's another news article that probably explains a bit for MGM:

http://www.businessweek.com/news/2012-12-06/mgm-resorts-international-seeks-5-billion-for-debt-refinancing

I think the casino stocks are still good bets now (was even better last week): BYD, CZR, MGM, NYNY, among others.

No fundamental reason for the CZR jump. Still in debt enough to declare BK and make the stock worth pennies.

On CZR, there were 2,000+ contracts traded today between 0.15 and 0.75 (up almost 5x for the day). The $7.50 strike Dec 22nd calls.

That many contracts represents 1/4 of the shares traded directly today.

I don't think it was necessarily fat fingers, but a single limit order to buy 2500 contracts could have that effect on the price in terms of the technical explanation of what happened.

If that's plausible, and if it's a small number of traders buying 2 thousand call options that expire in two weeks, then the question is does somebody know something, or are they just making a big bet.

Break-even for a call bought at 0.75 is $8.25 .. so it stands to reason whoever bought those calls knows something or just burned a ton of cash trying to pretend to know something (EG: if they have more than 200,000 shares on hand and are trying to dump them by burning some market call buys hoping the price will rise and stick so they can iceberg the shares without driving the price back down).

This is all very speculative and not very likely to mean anything, but at least something to think about.

One other possibility: maybe they changed their policy on how they do coupons. LOL.

Here's a similar analysis made by CNBC this morning on MGM explaining the leverage of the call volume as part of the story for what is going on.

http://www.cnbc.com/id/100289089?__source=yahoo|headline|quote|text|&par=yahoo

Fund managers trade these stocks in ways that individual investors are just left scratching their heads.

But this seems like manipulation to create a more favorable exit door for someone with a large position more than insider buying or ballsy bullish play to me personally.

Quote: Ahigh

But this seems like manipulation to create a more favorable exit door for someone with a large position more than insider buying or ballsy bullish play to me personally.

Tail wagging the dog. Probably right.

Still going strong. This is a $12 stock, IMO

Is that valuation based on the $9 per share they are going to lose in 2012 or the fact that the loss per share is improving to be less than $5 per share next year?

Be very careful on CZR, there are so many other better gaming plays that aren't levered up to BK status. Just my opinion, but I would take your profits from the low of sub $5 per share.....I think it hits that level again before it ever gets to $12.

Buy some LVS, WYNN or smaller cap SHFL. All of those have some much more going for them than CZR.

MGM up 3.39% on the day as of this writing - big news today is that yesterday MGM and PENN both gave presentations on their proposed casino in Springfield, MA. I can't seem to figure out which one is the front-runner, but it seems like investors are betting on MGM. If they lose the bid, I can only assume MGM will take a hit.

I just really want to break even on MGM so I can sell and not take a loss...I've over-extended myself in speculating on individual companies...down about 3% as of right now.

CZR is up 25% today to $16. Why did I sell this in January? D'oh!

Quote: s2dbaker

CZR is up 25% today to $16. Why did I sell this in January? D'oh!

Because you know their fundamentals are terrible and they are up to their hairline in debt?

Seriously, if I had a margin account, I would take today's spike as an opportunity to short them...but I have restrained myself from playing those games...

Just buy a put option or LEAP. I don't know what to think about CZR so I'm going to stay away from it. You know what they say, buy in weaknes and sell on strength.

The casino/gaming group continues to lag the overall market. Look at the year-to-date percentages on most of the stocks... they suck.
I track some of the casino stocks weekly: http://www.alanbestbuys.com/id103.html

Look at the annual summaries down the page.
Look at the current year to date returns.