With the People Inc. bid gone and the stock down 42% in 90 days, MGM is asking investors to value what it owns—not what Las Vegas is earning this quarter.
MGM · Earnings Call · 2026-10-28
The bid is gone; the defense is the story
MGM Resorts reported its third quarter into a stock that had already broken. The shares are down 41.9% over the last 90 trading days and sit 45.1% below their June peak, leaving a $6.86 billion market cap. This was not a call about a new growth engine. It was a call about what happens when a strategic overhang disappears and the operating narrative has to stand on its own. Bill Hornbuckle spent his opening remarks closing the People Inc. chapter: the offer was withdrawn, and the amended voting agreement restricts People from buying more once it reaches 29.9% and commits it to vote with the board on a change of control. “The discussion between MGM and people ends there. Management continues to be focused on the business.” — Bill Hornbuckle, Chief Executive Officer and President · 2026-10-28 The market had spent months treating MGM as a sum-of-the-parts puzzle with a possible bid; now it is a sum-of-the-parts puzzle without one.
Buyback math meets a broken stock
That is why Jonathan Halkyard's valuation monologue mattered more than any Las Vegas datapoint. He argued that marking MGM China at market and BetMGM at consensus leaves about $4.1 billion of value, or less than 3x trailing domestic opco EBITDA, with MGM Osaka and MGM Digital assigned zero.
When you calculate the MGM China stake at market value, and assign a consensus value to the BetMGM North America venture... you end up with roughly $4.1 billion of value, which implies a multiple of less than 3 times trailing 12-month domestic opco-adjusted EBITDA. This assigns zero value to both MGM Digital and MGM Osaka.
The buyback is the bridge. MGM did not repurchase shares in Q3 because of the People situation, but Halkyard said those circumstances are now concluded and the company has $1.4 billion of remaining authorization. “we chose not to repurchase shares in the 3rd quarter because of just the circumstances surrounding the company... those circumstances are now concluded” — Jonathan Halkyard, Chief Financial Officer · 2026-10-28 He even floated taking leverage up “a little bit” to capitalize on the dislocation. That is a different tone from the prior call, when the same CFO described buybacks as a steady background activity. It is also consistent with the tape: at 0.7x revenue and 8.6x free cash flow, the stock is priced for something worse than the call's operating numbers.
Las Vegas: the miss was ADR, not the casino
The operating story is a bifurcation. Las Vegas casino revenues rose 8% on record third-quarter slot win, group and convention delivered over 500,000 room nights, and high-end play was strong. High-end play is not a new theme for MGM—it has been the luxury cushion for several quarters—but the company leaned on it harder this time. Hornbuckle said MGM had taken on “some of the biggest customers in our history” and pushed back on the idea that global high-end players did not show up. The problem was the leisure and transient customer. Airfare into Las Vegas rose about 45% year over year, jet fuel hit records, and gas prices stayed high. “Jet fuel is up 90%... Las Vegas has been hurt more than most.” — Bill Hornbuckle, Chief Executive Officer and President · 2026-10-28 The result was flat occupancy at lower room rates, and the quarter's Las Vegas EBITDAR decline was mostly an ADR problem. airline pricing and jet fuel are the new villains in the MGM narrative, replacing the vaguer “value customer” language of prior calls.
The monthly cadence explains the stock reaction. Halkyard said July was flat, August down mid-single digits, and September down high single digits on ADR, before October improved. “In July... flat year on year... August was down about mid-single digits, and September was down high single digits... October right now is looking a lot more like July.” — Jonathan Halkyard, Chief Financial Officer · 2026-10-28 That is better than September, but it is not the “exit '26 on an up” language management used in February. “we feel very positive, positive enough to think that we're going to exit '26 on an up.” — William Hornbuckle, Chief Executive Officer and President · 2026-02-06 The prior quarter's answer on Vegas EBITDA was already more defensive than it sounded: “We are growing revenue for sure. Up against some challenges, on EBITDA. But absolutely, in the long haul, yes, we are.” — William Joseph Hornbuckle, Chief Executive Officer and President · 2026-07-29 Now even that long-haul confidence has to compete with a 42% drawdown. The booking window is still short, and the Canada issue—Canadian traffic was down 30% or more—has not fully healed. October may be seasonal relief, not proof of a new cycle.
Macau, digital, and the assets the market won't pay for
Macau is the offset. MGM China delivered record quarterly revenue and a 17.1% third-quarter share, with September at 19.2%. The margin was 26.9%, and Kenny Feng reiterated the mid-20s to high-20s guide. “we are at about 26.9%... mid-20s to high 20s.” — Kenneth Feng, President and Executive Director · 2026-10-28 The reported EBITDAR decline was largely a brand-fee transfer: the fee to MGM Resorts rose $22 million, so the consolidated economics were better than the segment line suggested. That is the cash engine funding Osaka and the buyback.
Digital is smaller but finally moving in the right direction. BetMGM's net revenue rose 7% and adjusted EBITDA improved by $112 million, with iGaming now nearly 70% of net revenue. MGM Digital narrowed its loss to $4 million. Brazil is the sore spot: the market shut down after the election, and Gary Fritz said the company is contingency planning rather than promising a quick reopen. The prediction market ruling is a fresh legal catalyst—the Ninth Circuit said sports event contracts are sports bets, not swaps—but it is a market-wide theme that MGM is now trying to bend toward its sports betting franchise, not a company-specific invention.
Osaka remains the long-dated call option. The project is about 11% complete, on time and on budget for 2030, with roughly ¥150-160 billion of annual spend in 2027 and 2028 before funding commitments are complete. Halkyard called it “over-equitized” and said refinancing could eventually repatriate cash. If the market is truly assigning zero to Osaka, the buyback math is less aggressive than it sounds—but it also means investors are being asked to underwrite a 2030 Japanese integrated resort while Las Vegas ADR is still contracting.
The tension
The quarter's real story is not that MGM missed Las Vegas. It is that management responded to a 42% drawdown with a valuation argument and a buyback threat, while the operating recovery still depends on airfare, fuel, and a short booking window. The balance sheet gives them room: effective net cash is negative $3.5 billion, liabilities are 91.5% of assets, and interest coverage has recovered to 4.9x. But the stock is not debating whether MGM can refinance. It is debating whether Las Vegas leisure demand has found a bottom. October says maybe; September says not yet. The People bid is gone, the buyback is reloaded, and room rates are still the swing factor.