A Run of Bad News for MGM Mirage

(Updated with more information on Tracinda's stake.)

LAS VEGAS (TheStreet) -- MGM Mirage's(MGM Quote) lower condo prices at its CityCenter development won't come without a cost.

The casino operator will incur a $955 million charge due to cutting prices 30% on some condos.

Without slashing prices at the $5.8 billion project, however, MGM feared the 2,400 units would go unoccupied, which would result in a much bigger loss.

CityCenter, a joint venture with Infinity World Development, will also realize a $348 million non-cash impairment charge in the third quarter related to its residential real estate under development. MGM will recognize 50% of that charge, or about $200 million before taxes.

The project is slated to open on Dec. 16.

Along with this loss, MGM's controlling shareholder, billionaire Kirk Kerkorian's Tracinda, said it might well be walking away from the company.

Tracinda said it would consider strategic partnerships or other alternatives for its MGM investment. This isn't the first time Tracinda has threatened to walk, but investors fear this time they may mean it.

"There is substantial unrecognized value in MGM Mirage and CityCenter that is not reflected in the market value of MGM Mirage's stock," Tracinda said in a statement.

But Tracinda, which owns a 39% stake in MGM, said it would not go forward with any deal until CityCenter is up and running.

Shares of MGM are growing 2.7% to $12.11 in morning trading.

-- Reported by Jeanine Poggi in New York

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