Jun 20, 2022
You might think of the MGM Grand casinos and hotels as a Las Vegas institution, but the company’s domestic operations are limited to just one property. In fact, 80% of the company’s revenue comes from gaming in Macau. That being said, there are five US-based investors who have a stake in this international gambling empire.
This blog post will cover these five shareholders, as well as their stakes in MGM Resorts International (MGMRI). It will also analyze each group's expectations for the future of MGMRI and what we should expect from them going forward.
Thomas Lee is a computer science and engineering graduate who has been involved in the financial world since 1989. He is the chairman of TPG Capital, the largest private equity firm in the US. As of 2013, he was worth over $2 billion and ranked as the 21st richest person in America by Forbes. Lee made his money investing in tech companies like Rackspace Hosting and Dell Computer. Before launching TPG, he was CEO of SAP America, which was acquired by SAP for $3.4 billion from American Express back in 2001 (around $9 billion today). Nowadays, Lee focuses on investing in online companies like Facebook and Twitter, among others.
Aside from TPG Capital, Lee owns a number of different shares in other companies, including:
-- Stations Casinos (where he serves as chairman)
-- Fortress Investment Group, another private equity firm
-- MGM Resorts International
MGM Resorts International contains a portfolio of casino resorts and hotels in Las Vegas and is currently valued at $18.3 billion according to its market capitalization. While Lee doesn’t own the majority stake in this company, he does have a significant ownership interest. That being said, TPG Capital is his primary investment company and the exact amount of his stake has not been disclosed. It would appear that it is one of the highest stakes owned by any of the five shareholders.
Thomas Barrack Jr. is a successful private equity investor and real estate developer who helped build what is now known as Colony Capital LLC, which has significant investments in some of the top tech companies in America, including Uber Technologies and LinkedIn among others. However, the most famous for building a billion-dollar fortune investing in Trump real estate properties during the 90s (ironically alongside Donald Trump himself). Not only does he own an interest in Colony Capital, but he also personally owns stakes in nearly a dozen other companies, including:
-- Artemis Real Estate Partners II
-- Colony Investment. Inc.
He also acts as chairman for the following companies:
-- Colony NorthStar, another investment company owned by him and his two brothers with over $20 billion in assets under management.
Barrack is currently worth well over $1 billion and is ranked as the 903rd richest person in America by Forbes. Much of his wealth comes from his real estate ventures, but he has also recently begun investing in technology companies.
Like Lee, Barrack’s exact stake in MGM Resorts International is not clear. However, he has been an active shareholder since 2010 and has hundreds of millions invested in the company. He also sits on its board of directors as chairman emeritus and continues to remain a big part of its future plans.
James Murren was the CEO and chairman of MGM Resorts International and its subsidiary companies including Mandalay Resort Group, which owns the famous Mandalay Bay resort on the Las Vegas strip. He has been with the company since 2004 and is valued at $5.5 million. His salary was even cut in 2011 by 15% as a way to help preserve company profits amidst the Great Recession, but it appears that he has been compensated very well since then, as he owns an additional 5.9 million shares of the company’s stock (worth over $300 million) and has been awarded millions in additional payments from the board of directors. However, this may be more of a result of his helping to increase the company's value from just $1.4 billion back in 2004 to well over $18 billion today.
Daniel Snyder was the owner and chairman of the Washington Redskins National Football League team and he's the richest man in all of Washington, DC. He has a net worth of over $2 billion, which is nearly $1 billion more than his nearest competitor in DC, who just happens to be Mark Cuban. His wealth comes from his stake in Snyder Communications, Inc., which was sold to the telecom giant AT&T for $2.5 billion back in 1999 (around $4.5 billion today). Unfortunately, many people outside of DC know Snyder for his recent controversies with media and Native American groups. These have included bringing the Redskins to DC and selling naming rights for the team’s stadium.
Snyder has been a big part of MGM Resorts International since 2004 when he purchased 10% of their stock for approximately $106 million (it is now worth around $600 million). He also sits on their board of directors as the chairman and has been the main driver of their expansion abroad. However, he is taking his business elsewhere, as he recently sold his shares in MGM Resorts International to Goldman Sachs, New York Life Insurance Company, and Guggenheim Partners who will be paying him another $1 billion over time.
Steven was the founder and CEO of SAC Capital Advisors, which is a rather large hedge fund, operating with approximately $15 billion in assets under management. He is also the founder and chairman of Point72 Asset Management, which is a mid-tier hedge fund with over $27 billion in assets. He founded the firm in 1992 and earned his investors around $11.7 billion by 2010. SAC Capital was one of the largest investors in IT companies like Facebook, LinkedIn, Zynga, and Twitter. While these are some pretty huge successes, SAC Capital has been permanently banned from trading by the SEC after it was found that they were also involved in insider trading and market manipulation among other things.
Cohen’s stake in MGM Resorts International has decreased significantly since 2011 when he sold around 500,000 shares of stock worth approximately $50 million to Goldman Sachs Group Inc. and New York Life Investment Management. However, he was compensated very well in stock options, which has resulted in total compensation of more than $30 million over the past 4 years.