MGM, Casino Stocks Win Big

Under the joint venture scenario, each of MGM's casinos could be injected into a new venture at the market-based land value or a multiple of cash flow, if that is the higher price. MGM, in turn, would likely retain lucrative management contracts. The company could also retain an equity stake.

Fath admits there are numerous possibilities for MGM now. "I don't know where it goes, but almost any way it slices and dices, it could end up with a favorable scenario for MGM investors," he says.

It's also a win-win situation for Kerkorian, who by nearly all accounts is a brilliant investor. As MGM's stock rises, Kerkorian now has more favorable currency to make a bid for the company's properties. Alternatively, if he decides to pay all cash for properties and retain his MGM stock, then the casino would receive funds to pay down debt, and MGM's stock would rise in value.

Kerkorian, who turns 90 next month, has made a fortune buying and selling casinos in Las Vegas over his lifespan. He opened the original MGM Grand Hotel casino in Las Vegas in 1973. That building later burned down, but Kerkorian sold the rebuilt property and others to Bally's Entertainment in 1986.

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