MGMB

MGM Holdings Inc

Consumer


Presented:12/18/2020
Price:$84.50
Cap:$4.33B
Current Price:$131.00
Cap:$6.71B

Presented

Date12/18/2020
Price$84.50
Market Cap$4.33B
Ent Value$5.26B
P/E Ratio1603.42x
Book Value$27.74
Div Yield0%
Shares O/S51.19M
Ave Daily VolN/A
Short Int8.83%

Current

Price$131.00
Market Cap$6.71B
MGM Holdings, Inc. engages in the provision of entertainment. It specializes in the production and distribution of film and television programs. It operates through the following business segments: Film Content, Television Content, and Media Networks. The Film Content segment relates to the development, production and co-production of film content, and typically participate with third parties in various co-production arrangements to produce, co-finance and distribute content, as well a content developed by the partners. The Television Content segment refers to the production and distribution of scripted television series and unscripted television shows. The Media Networks segment consists of EPIX and wholly-owned and joint venture broadcast and cable networks, which currently include an MGM-branded channel in the U.S. The company was founded on February 11, 2005 and is headquartered in Beverly Hills, CA.

Publicly traded companies mentioned herein: Apple Inc (AAPL), AT&T Inc (T), Comcast Corp (CMCSA), Hasbro Inc (HAS), MGM Holdings Inc (MGMB), Netflix Inc (NFLX), Sony Corp (SNE), Walt Disney Co/The (DIS)

Highlights

The presenter is long shares of MGM Holdings Inc (MGMB), which was acquired out of bankruptcy in 2010 and is currently priced at ~$80 per share (~11x forward EBITDA) in the dealer market. MGMB owns a TV library (e.g., Vikings, Fargo, The Handmaid’s Tale, Shark Tank), a movie library (e.g., James Bond franchise, Rocky franchise, Pink Panther franchise), and premium pay cable network Epix. Its ~$5B EV consists of ~$3.4B of equity value and ~$1.6B of net debt. He expects an eventual takeout in which a strategic acquirer pays a low- to mid-teen EBITDA multiple and calculates a $140+ share price based on a 17x forward EBITDA valuation, which equates to an ~$8B EV.

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Idea Discussion

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