Acquisition Premium Injects Immediate Boost into MGM Resorts International (MGM) Shares

Acquisition Premium Injects Immediate Boost into MGM Resorts International (MGM) Shares

Fri, September 4, 2026 at 6:15 PM GMT+3 3 min read

Meridian Funds, managed by ArrowMark Partners, released its second-quarter 2026 investor letter for "Meridian Hedged Equity Fund". The letter can be downloaded here. U.S. equities rebounded strongly in the second quarter, recovering from an earlier selloff due to geopolitical tensions, primarily with Iran. The easing of these tensions caused crude oil prices to drop significantly, yet inflation remained a concern, with consumer prices rising 4.2% year-over-year in May. The Federal Reserve held interest rates steady but hinted at future hikes, reflecting a hawkish shift under new Chair Kevin Warsh. While the Meridian Hedged Equity Fund gained 4.50% during this period, it lagged behind the S&P 500's 15.20% return. The Fund focuses on high-quality companies, balancing growth potential with risk management through covered call options. Moving forward, the firm anticipates volatility but views it as a potential opportunity and is committed to disciplined research and investing in businesses with solid fundamentals and long-term growth prospects. Also, check the fund's top five holdings to see its best picks in 2026.

In its second-quarter 2026 investor letter, Meridian Hedged Equity Fund highlighted MGM Resorts International (NYSE:MGM). MGM Resorts International (NYSE:MGM) is a leading US-based gaming, hospitality, and entertainment company. On September 03, 2026, MGM Resorts International (NYSE:MGM) closed at $41.13 per share, reflecting a market capitalization of $10.43 billion. MGM Resorts International (NYSE:MGM) posted a one-month return of -7.51%, while its shares gained 12.13% over the past 52 weeks.

Meridian Hedged Equity Fund stated the following regarding MGM Resorts International (NYSE:MGM) in its Q2 2026 investor letter:

"MGM Resorts International (NYSE:MGM) is a global gaming and entertainment company that operates a diverse portfolio of 30 unique hotel and destination resorts featuring best-in-class casinos, meeting spaces, and live entertainment. The company also maintains a significant digital presence through its 50/50 BetMGM venture in North America and is expanding internationally with major projects such as the development of an integrated resort in Osaka, Japan. The company's performance in the second quarter of 2026 was bolstered by record results on the Las Vegas Strip, where high-end leisure demand remained resilient and convention room-night mix increased to approximately 20%. Growth was further bolstered by MGM China, which maintained a strong 17% mass market share and benefited from robust premium gaming volumes in Macau. Additionally, the broader gaming sector received a valuation uplift from the late-May announcement that Caesars Entertainment would be acquired, which refocused investor attention on the intrinsic cash flow value of casino operators. The stock's outperformance was significantly enhanced by a June 1, 2026, non-binding proposal from People Incorporated (formerly IAC) to acquire all outstanding shares of MGM for $48.30 per share in cash, a move that immediately injected a 15% acquisition premium into the stock's valuation."

MGM Resorts International (NYSE:MGM) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 63 hedge fund portfolios held MGM Resorts International (NYSE:MGM) at the end of the second quarter, which was 57 in the previous quarter.While we acknowledge the potential of MGM Resorts International (NYSE:MGM) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we discussed MGM Resorts International (NYSE:MGM) and highlighted Longleaf Partners Fund's views on the company. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.