In an announcement on Wednesday, MGM Resorts commented that its CEO and chairman Jim Murren has decided to step down before the end of his contract. Murren, who was brought on board as the hospitality company’s CEO in 2008, said he will continue to serve as the CEO for as long as the company takes to appoint a new one.
As an initial response to the news, MGM Resorts was reported trading 7% higher in extending trading on Wednesday. Losing some of it, the company settled around a 4% gain later on. MGM’s market capitalization is at $17.3 billion. The company recorded an around 17% gain in the stock market in the previous 12 months.
A committee comprising independent directors has already been established at MGM Resorts to look for a new CEO.
Travel Ban And Suspended Business Operations To Hit MGM Resorts In 2020
The previous financial guidance for fiscal 2020 has also been withdrawn as the U.S casino operator expressed uncertainty regarding the extent of the impact of the recent outbreak of Coronavirus in China. The company cited wealthy Chinese patronage to be the bearer of massive business in Macau and Las Vegas. The currently imposed travel ban and suspended business operations across China, therefore, are likely to hit the company’s performance in 2020.
MGM also highlighted that it suspended operations at its Macau properties in compliance with the government’s recommendation to contain the spread of the virus. Since it is not yet evident that for how long will the operations remain suspended, the company added, it is difficult to estimate the impact of the health emergency on MGM Resorts’ performance in the long run.
A few of the non-gaming operations at MGM Resorts in Macau, however, are still operational in order to support the guests staying at the hotel. Such operations, as per the company are amounting to $1.5 million in expenses per day.
MGM Resort’s Performance In The Stock Market
At the time of writing, MGM Resorts is exchanging hands at $31.80 per share that marks an around 5% decline in the stock market in 2020 so far. In 2019, however, MGM performed largely upbeat in the stock market. It opened at $25 in January 2019 while closed the last year at a much higher $33.75 per share that translated into an almost 35% annual gain. MGM’s all-time high was recorded in 2007 when the stock was seen trading at around $97.