MGM Resorts International has canceled plans to buy back $1.25 billion worth of shares after the coronavirus outbreak created a highly volatile stock market and increased the number of hotel and convention cancellations.
The updated share buyback plan, which was announced late February, was due to expire at midnight on Thursday.
MGM Chairman and CEO Jim Murren said the “unforeseen and unprecedented volatility” in the financial markets affected the company’s ability to determine and maintain an offering price range.
The casino operator had originally announced plans to repurchase shares between $29 and $34 on Feb. 13. But the company released a statement Feb. 28 saying it had lowered the price it would offer, to somewhere between $23.50 and $28.
So far this month, MGM shares have fallen 38 percent. They’ve dropped 54 percent in 2020 so far.
Murren said the efforts to contain the virus led to less travel demand in Las Vegas as conventions and other major events continue to get postponed or canceled.
“Our domestic resorts have been impacted in the near term primarily driven by increased cancellations in our hotel and convention bookings in Las Vegas particularly during the months of March and April,” Murren said. “We are actively managing our costs to help protect our margins.”
Murren added that MGM China continues to be affected by low visitation after the 15-day closure of its Macao properties.
“At this time, we believe the Company has ample liquidity to weather the current uncertainties in the marketplace,” Murren said. “More importantly, we do not expect the coronavirus to have a material impact on our business long term.”
On Thursday, MGM shares closed down 15.6 percent to $15.26.