The marquee and sign at an entrance at MGM Grand Hotel & Casino display messages after the Las Vegas Strip resort was closed as the coronavirus continues to spread across the United States on March 17, 2020 in Las Vegas, Nevada.
Ethan Miller | Getty Images
Barry Diller’s IAC/InterActive said on Monday it has bought a 12% stake in MGM Resorts International for about $1 billion, sending the casino operator’s shares soaring 14%.
The investment comes at a time when the gambling industry has been ravaged by government restrictions on movement due to the Covid-19 pandemic, as well as fears about public gatherings.
MGM reported a 91% fall in revenue in the latest reported quarter and has slashed its dividend to weather the impact of the health crisis on its financials. Shares of the company have sunk more than 35% this year.
MGM’s online gaming business, which currently constitutes a tiny portion of its revenue, was what initially attracted Diller, the billionaire told shareholders in a letter.
“MGM presented a ‘once in a decade’ opportunity for IAC to own a meaningful piece of a preeminent brand in a large category with great potential to move online.”
Diller added he has followed the online gaming space for a while, looking for an opportunity to enter the $450 billion global industry.
IAC has a history of building businesses and later splitting them into separate companies — travel site Expedia Group and ticket booking site Ticketmaster are some examples.
Shares of IAC, which recently completed separation of Match Group into a separate company, fell about 1% after the news.
