MGM shares storm after IAC takes 12% stake in online gaming bet

IAC / InterActiveCorp. IAC,
-0.22%
announced Monday morning that it had acquired a 12% stake in MGM Resorts International MGM,
+ 12.08%
that’s worth about $ 1 billion. IAC shares are up 2% in premium trading, while MGM’s share is up 20%. “What initially attracted us to MGM, in addition to its leadership in leisure, hospitality and gaming, was an area that currently accounts for a small portion of its revenue – online gaming,” IAC Chairman Barry Diller said in a release. In a letter to shareholders, Diller and IAC Chief Executive Joey Levin compared MGM to Walt Disney Co. DIS,
+ 0.73%,
writing that “MGM is also an aspiring market that could be delivered with daily accessibility and offer consumers for gaming (including the 34 million M-life Rewards members) a wider range of services, both physical and digital, than any competitor.” The move comes shortly after the divorce of Match Group Inc. MTCH,
+ 0.66%
of IAC, which Diller said left IAC with “$ 3.9 billion in cash, no debt, and its opportunistic zeal intact.” IAC shares have risen 4.4% over the past month compared to the S&P 500 SPX,
+ 0.10%
has increased by 5.2%.