TLDR
- MGM Resorts is in talks to buy Barry Diller’s People Inc, just one day after People dropped its own $12.4 billion bid for MGM.
- Diller built his roughly 27% MGM stake back in 2020 when Covid crushed casino stocks.
- People Inc stock jumped as much as 11% in premarket trading Friday on the news.
- MGM stock fell 11% heading into Friday’s session, giving back gains tied to the earlier takeover chatter.
- The deal talk fits a wider pattern of billionaires betting on old-school Las Vegas casino real estate, including Tilman Fertitta’s $17.6 billion purchase of Caesars.
MGM Resorts stock has had a wild few days. The casino operator is now reportedly discussing a bid to buy Barry Diller’s People Inc, just one day after People walked away from its own $12.4 billion offer to buy MGM.
MGM stock dropped 11% heading into Friday’s trading session. That erased the gains the stock had picked up when news of Diller’s takeover interest first broke.
MGM Resorts International, MGM
People Inc stock moved the other way. Shares jumped as much as 11% in premarket trading Friday on the reversal.
The Wall Street Journal first reported that MGM executives are weighing a bid for People. Reuters later confirmed the story, citing people familiar with the matter.
Neither company has commented publicly yet. MGM did not respond to a request for comment, and People declined to comment.
Why MGM Wants People
Diller began buying MGM stock in 2020. Casino operators were getting hammered by Covid closures and travel restrictions at the time, and Diller saw a bargain.
He built up his stake to about 27% of MGM. That stake is now worth nearly as much as People’s entire market capitalization.
If MGM buys People, it would effectively buy back a big chunk of its own stock. It would also pick up People’s other media brands in the process.
People, formerly known as IAC, owns titles including People magazine, Food & Wine, Southern Living and the Daily Beast. The company has spent recent years narrowing its focus to publishing and its MGM stake.
A Bigger Bet on Las Vegas
Diller’s original case for buying MGM was that its physical properties, like the Bellagio, are undervalued in a market obsessed with digital assets. He’s not alone in that thinking.
Tilman Fertitta, owner of Golden Nugget, is buying Caesars Entertainment for $17.6 billion. Fertitta also holds a major stake in Wynn Resorts.
Both moves suggest some big investors think bricks-and-mortar casinos still have room to run. The market hasn’t fully bought in yet though, given how far MGM stock has fallen recently.
MGM’s peer Bally’s has faced its own pressure too, tied to its plans to build and expand casinos across the country. The sector overall is competing against a boom in online sports betting and prediction markets.
People’s most recent quarterly results, reported last month, showed improving profitability in its publishing business. That came despite pressure on web traffic from AI-driven changes to search.
If MGM decides to move forward, a formal proposal could come within days, according to the Wall Street Journal report. For now, the two companies remain in early discussions with no confirmed terms.
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