Gaming stock selloff continues

Tuesday, Sept. 18, 2001 | 10:35 a.m.

Investors continued to sell shares in all major Las Vegas casino operators this morning, despite a slight recovery in the overall market.

Worst hit in morning trading was Mandalay Resort Group, which fell $2.39 to $16.61, a 52-week low. That is a one-day decline of more than 12 percent; since the market re-opened Monday, Mandalay has lost more than 30 percent of its market value.

MGM MIRAGE and Park Place Entertainment Corp. also continued to slide after hitting 52-week lows Monday. Park Place fell 27 cents to $7.73, a 3.3 percent decline. Park Place is down 22 percent since its Monday open.

MGM MIRAGE lost 35 cents to trade at $21.65, a 1.6 percent drop. The company's stock is now down 24 percent this week. The move followed a Monday downgrade of MGM MIRAGE by gaming analyst Dennis Forst of McDonald Investments, who lowered MGM MIRAGE from "buy" to "hold." Forst cited slowdowns in tourism, international travel and conventions as reasons for the downgrade.

"It was the only major (casino operator) I had a buy on," Forst said. "It was clear tourism and travel are going to be impacted. The slowdown in the economy is going to hurt Las Vegas, and MGM gets some 80 percent of their cash flow from Las Vegas. It was a pretty simple analysis."

Harrah's Entertainment Inc. lost 5 percent this morning, dropping $1.20 to $23.40. It is down 18.5 percent so far this week, and is just above its 52-week low of $23.

Station Casinos Inc. was faring better than most gaming companies this morning; its stock traded at $10.89, down less than 1 percent. It has fallen 11 percent so far this week, but remains slightly above its 52-week low of $10.70.