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Old 02-16-2017, 10:47 AM
 
73 posts, read 76,014 times
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MGM stock sinks as fourth-quarter results disappoint on Vegas weakness

maybe they will bring back free parking? LOL. jk.

Here's another interpretation from another news source......... http://www.reviewjournal.com/busines...y-outlook-2017
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Old 02-16-2017, 02:16 PM
 
14,100 posts, read 11,856,576 times
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They're blaming it on the convention business, but I wonder if there is enough information in the financial to show if the paid parking change isn't biting them in the a$$. Do they publish quarterly occupancy rate data?
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Old 02-16-2017, 02:31 PM
 
5,781 posts, read 10,302,241 times
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Quote:
Originally Posted by BBMW View Post
They're blaming it on the convention business, but I wonder if there is enough information in the financial to show if the paid parking change isn't biting them in the a$$. Do they publish quarterly occupancy rate data?
Of course they do. They missed expectations. They didn't lose money, they didn't see revenues or profit go down. They just didn't do as well as analysts expected. Don't blow it out of proportion or get the wrong message here.
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Old 02-16-2017, 03:22 PM
 
7,173 posts, read 4,171,039 times
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Originally Posted by Willy702 View Post
Of course they do. They missed expectations. They didn't lose money, they didn't see revenues or profit go down. They just didn't do as well as analysts expected. Don't blow it out of proportion or get the wrong message here.
Exactly - analysts set a target based on their research and company forecasts. If a company doesn't meet those numbers, analysts become sad and the stock takes a hit. It happens everyday in the financial industry.
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Old 02-16-2017, 04:46 PM
 
73 posts, read 76,014 times
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***This is written in no way to demean or offend anyone at all***

The bottom line for big corporate business is money and profitability. If you are not profitable to the company (however they define profitability), then they don't want your business. It makes sense from a business point of view: it saves room in the casinos and comp system to cater to others who are more profitable. After all the less profitable people are weeded out.... the more profitable customers can then have more wiggle room on the casino floor, better parking spaces in the self parking garage (I noticed that MGM self parking is emptier)... etc.

The less profitable people will feel shafted and will naturally bring their business somewhere else where the threshold for profitability is lower... i.e. downtown.

BTW... I believe myself to be one of those who is not profitable to MGM.
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Old 02-16-2017, 06:58 PM
 
5,781 posts, read 10,302,241 times
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Originally Posted by caltrinity View Post
***This is written in no way to demean or offend anyone at all***

The bottom line for big corporate business is money and profitability. If you are not profitable to the company (however they define profitability), then they don't want your business. It makes sense from a business point of view: it saves room in the casinos and comp system to cater to others who are more profitable. After all the less profitable people are weeded out.... the more profitable customers can then have more wiggle room on the casino floor, better parking spaces in the self parking garage (I noticed that MGM self parking is emptier)... etc.

The less profitable people will feel shafted and will naturally bring their business somewhere else where the threshold for profitability is lower... i.e. downtown.

BTW... I believe myself to be one of those who is not profitable to MGM.
Or course this is true and yet someone will come in here and post that Vegas has changed for the worse and how they could make more money than the suits running MGM if they just followed their advice and so forth. The minions with no say think they get to voice an opinion that has no bearing on anything and it makes them feel better so everyone is happy, but indeed nothing is going to change because businesswise it makes no sense to change.
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Old 02-16-2017, 07:57 PM
 
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Do we get a say in how they run their business? Not directly. But we do get a chance to decide where we spend our money. It seems like less than projected spent theirs in MGM properties.

Calendar issues and an convention shifts shouldn't effect whether a company hits or misses it's earnings estimates. Those issues are known well in advance, and should be baked into the estimates to begin with. Consumers not reacting in a way the executives predicted and would have preferred, to a significant change in the pricing paradigm of their product might very well cause an earnings miss, especially when the miss occurs when said new pricing paradigm is implemented.

Last edited by BBMW; 02-16-2017 at 08:06 PM..
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Old 02-16-2017, 08:16 PM
 
14,100 posts, read 11,856,576 times
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IIRC, way back when the parking fees were first announced, my reaction was, "Let's see if there's a backlash, and if it ends up costing them more is lost revenue from other sources, than they collect in parking revenue." Also IIRC, this started ramping up third quarter, so fourth quarter is the first full quarter where it's fully implemented, and where we can start seeing the consumer reaction and the financial impact on their business. And in this quarter they have an earnings miss.

You have to admit, it's one hell of a coincidence.
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Old 02-16-2017, 09:55 PM
 
Location: Tucson/Nogales
21,007 posts, read 24,914,020 times
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They can always break up their monopoly on the south Strip and sell a property or 2, wouldn't that be nice? Bring back the old mob, sell one to the old mob, and then you'll see some competition!
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Old 02-17-2017, 01:07 AM
 
Location: Aliante
3,435 posts, read 2,746,782 times
Reputation: 2921
The analyst speculated that MGM would do better than it did and they missed the mark by 9 percent. Even though there was a 20 M increase in revenue from prior. So it's not so bad but not as good as they predicted. Thus the sell off of market shares. On the plus side it's a good time to buy MGM shares.

As for the parking concerns it reflects shots fired and message received. I believe this was anticipated to some degree just not as anticipated as a hit on their conventions. Now that the rest of the major Strip properties announced that they're going to adopt a similar parking fee schedule this will level the playing field in Las Vegas again.

That market that is savvy and turned off by paying more and more will likely either continue to look elsewhere for their vacation destinations or accept that it's like going to most anywhere else. They'll run the numbers of course and make a determination of what they can get for the value. We'll also see bargain basement discounts offered at various times of the year to appeal to that demographic. Similar to what the nickle and dime airlines did. So these same clients will have to wait and see what low room rate deals are offered at what times.
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