Sternies were wrong about MGM… It is indeed a good stock.

LAS VEGAS 2nd Straight monthly rise in GAMING REVENUE!

MGM continues to rise despite the fear of CityCenter possible bankruptcy if it cannot meet its covenant to generate $1.5BLN Ebitda.

However, it seems that Las Vegas is improving. As USA recovers, and people feel so much richer due to the inflated stock market, Las Vegas would be the popular choice of destination for many.

How could MACAU’s gaming be larger than Las Vegas’? USA economy is 4X larger than China’s… The chinese really love to gamble. So do the Americans.

Las Vegas gaming revenue will return to its norm and it will grow just like Macau’s.

MGM owns 20% of Las Vegas…. Compare this with LVS that owns 20% of MACAU!

That’s the reason why LVS is trading so many times higher than MGM.

That’s because Macau’s gaming revenue ($15 billion) is almost twice that of Las Vegas (now at a miserable $6 billion).

It is great to note that Macau’s 2007 gaming revenue was only $7 billion. The tremendous growth in its gaming industry cannot be maintained in my opinion. I doubt Macau will see gaming revenue climb to $30 billion.

However, I think Las Vegas’ gaming revenue should be able to climb back to its norm ($8 billion), and that alone would be enough to help MGM’s come back to profitability and thus provide the much needed equity upside.

UPSIDE RISK is huge. Possible 100% vs losses of 50%.

MGM is a pure LAS VEGAS recovery play. If you do believe in that, then play MGM all the way to $30 or $50s..

CITYCENTER will be one of the reasons why MGM will succeed. This property is still losing money, but it will turn around soon as the management has already figured out how to operate this at its optimal level and thus generate tons of money.