MGM stock surges after IAC takes 12% stake in a bet on online gaming
IAC/InterActiveCorp. announced Monday morning that it had accumulated a 12% stake in MGM Resorts International that's worth about $1 billon. IAC shares are up 2% in premarket trading while MGM's stock is up 20%. "What initially attracted us to MGM, besides its leadership in leisure, hospitality and gaming, was an area that currently comprises a tiny portion of its revenue - online gaming," IAC Chairman Barry Diller said in a release. In a letter to shareholders, Diller and IAC Chief Executive Joey Levin likened MGM to Walt Disney Co. , writing that "MGM also is an aspirational brand, which could be delivered with daily accessibility and offer gaming consumers (including the 34 million M-life Rewards members) a wider range of services, both physical and digital, than any competitor." The move comes shortly after the separation of Match Group Inc. from IAC, which Diller said left IAC with "$3.9 billion of cash, no debt, and its opportunistic zeal intact." IAC shares have risen 4.4% over the past month as the S&P 500 has increased 5.2%.
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