• Market Crumbs

MGM Looks For A Buyer Amid Content Euphoria


Image via Glenn Carstens-Peters on Unsplash

With much of the world on lockdown for the better part of this year, it's not surprising that people have turned to streaming services and content providers to stay entertained.


Shares of Netflix are up more than 60% so far this year as a strong first half of the year led the company to forecast a record 34 million paid net adds for this year, which would be well above the prior high of 28.6 million in 2018.


Shares of Disney last week soared to a new all-time high after the company raised its subscriber forecasts for Disney+ and announced 105 movies and TV series will be released, with 80% of them going direct-to-consumer through its various media properties.


Earlier this year live TV streaming platform fuboTV merged with FaceBank Group to join the public markets. The combined company, which wants to "create a content delivery platform for traditional and future-form IP," has become one of the hottest stocks as of late and is up more than 100% over the last week alone.

Amid the investor frenzy for anything relating to content streaming, the Wall Street Journal reported earlier this week that MGM Holdings, which is notable for its co-ownership of the James Bond franchise, has enlisted Morgan Stanley and LionTree LLC to begin a formal sale process.


MGM has a value of about $5.5 billion, including debt, based on privately traded shares. Despite exploring a sale multiple times over the previous few years, MGM was unable to find a buyer at the price it was seeking.


MGM reportedly believes its extensive library, which consists of more than 4,000 titles and 17,000 hours of television programming, could be valuable to companies looking to expand their streaming services. MGM is looking beyond Hollywood this time as it reportedly believes an international media company, private-equity investor or even a blank-check company could be interested in making a deal.


MGM's largest shareholder, hedge fund Anchorage Capital Group, is facing pressure following weak performance and has seen its MGM investment become a larger portion of its portfolio as the firm's assets under management have shrunk. Anchorage Capital is founded by former Goldman Sachs executive Kevin Ulrich, who also sits on MGM's board of directors.


Given the troubles facing MGM's largest investor and the release of MGM's latest Bond film continuing to face delays, it may not be long before MGM finds a buyer as demand for content investments remains strong.


Leftover Crumbs

  • Existing home sales drop. Existing home sales fell by 2.5% in November compared to October, marking the first decline in five months, according to the National Association of Realtors. Existing home sales in November were up more than 25% from last year as the number of homes available for sale has declined by more than 20% over the same period to 1.28 million. The current inventory marks a 2.3-month supply based on current sales and marks the lowest total since the NAR began tracking the metric in 1982. "This latest decline could be due to the fact that home prices are rising way fast," NAR chief economist Lawrence Yun said.

  • Strike while the iron is hot. Following a report that Apple will venture into the automobile market, lidar manufacturer Ouster announced it will go public through a merger with Colonnade Acquisition Corp. The deal values Ouster at $1.9 billion and makes it the fifth lidar manufacturer to go public through a merger with a SPAC so far this year. "The vision of the future that we're pushing towards is lidar on every vehicle on earth, every moving object on earth and every piece of intelligent fixed infrastructure on earth, in the same way that camera technology has propagated and become ubiquitous in the last 20 years," Ouster co-founder and CEO Angus Pacala said.

  • Boeing lands first 737 MAX order. Alaska Airlines has ordered 23 737 MAX planes from Boeing, marking the first new order from a U.S. carrier since the Federal Aviation Administration lifted its grounding order on the aircraft last month. "We said: What is it we can do to fundamentally and permanently take advantage of this crisis and improve the competitive position of Alaska?" Alaska Airlines CEO Brad Tilden told CNBC. "We said if we can largely get back to a single fleet, that would be in our interest."

  • SEC slaps Ripple with charges. The U.S. Securities and Exchange Commission filed an action against Ripple Labs and two executives yesterday, alleging that they raised more than $1.3 billion through an unregistered, ongoing digital asset securities offering. "Issuers seeking the benefits of a public offering, including access to retail investors, broad distribution and a secondary trading market, must comply with the federal securities laws that require registration of offerings unless an exemption from registration applies," SEC Enforcement Division director Stephanie Avakian said.

  • Walmart sued for role in opioid crisis. The U.S. Department of Justice filed a lawsuit against Walmart, alleging the company unlawfully dispensed controlled substances from pharmacies and helped fuel the opioid crisis in America. "As one of the largest pharmacy chains and wholesale drug distributors in the country, Walmart had the responsibility and the means to help prevent the diversion of prescription opioids," acting assistant attorney general of the Civil Division Jeffrey Bossert Clark said. "Instead, for years, it did the opposite."