Investors buying more MGM Resorts shares in secondary stock offering

By Steve Green

Tuesday, Nov. 9, 2010 | 8:57 a.m.

Despite the recession limiting visitation to -- and spending on -- the Las Vegas Strip, investors seem eager to buy the shares of Strip operator MGM Resorts International.

MGM Resorts today said Barclays Capital Inc. has exercised in full its option to purchase an additional 6.135 million shares of common stock from the company and an additional 4.1673 million shares from MGM Resorts' largest shareholder, Tracinda Corp., at a price of $12.52 per share.

MGM Resorts said it will net $76.8 million from the exercise of the over-allotment option, lifting to $588.8 million the amount raised from the secondary stock offering announced last month.

In the initial sale last month, MGM Resorts issued 40.9 million shares and Tracinda sold about 27.8 million shares of MGM Resorts stock.

Cash raised from the offering is being used to pay down debt and for general corporate purposes. Along with a note issuance, asset sales and other transactions, the company in recent weeks has beefed up its balance sheet by about $1.5 billion.

MGM Resorts stock today traded at $13.42, up 50 cents.

Despite MGM Resorts posting a third quarter loss of $317.9 million, the stock received a boost after CNBC commentator Jim Cramer last week called the company "the best Vegas speculative play" on his "Mad Money" program and said MGM Resorts is poised for a rebound on the Strip.