MGM Mirage slumps on stock sale

MGM Mirage fell 11 per cent in early trading after selling 143 million shares in a stock offering, almost double the number planned, to raise $1 billion (Dh3.67 billion) to repay debt.

The shares were sold for $7 each, the underwriters said on Wednesday after markets closed. Las Vegas-based MGM Mirage fell $1 to $7.70 yesterday in trading before US exchanges opened after dropping 30 per cent yesterday on the New York Stock Exchange, the biggest decline since at least 1989.

The drop in the stock price reflects dilution from the sale, which will increase the stock outstanding by 52 per cent from 276.6 million shares reported at the end of the first quarter. The offering is one part of a refinancing of the casino company, controlled by Kirk Kerkorian, announced on Wednesday to restructure its $14 billion debt and head off default.