Just a few years ago, MGM was mired in bankruptcy. But after a tough restructuring, the studio is back on track. Interestingly enough, it is now in the process of pulling off an IPO (according to a report from Bloomberg). The deal could happen in mid to late October.
The timing is certainly spot-on. Keep in mind that MGM’s James Bond film, Skyfall, will hit the screens on Oct. 26 in Europe and Nov. 9 in the U.S. The studio is also a co-producer of the upcoming Hobbit film, which should be a big hit. It’s slated for Dec. 14.
The buzz should help get investors excited about the MGM deal. But other factors should play a role as well. For example, the company has a much lower cost structure — because of the restructuring — and has no long-term debt. What’s more, MGM is a partner in Epix, which includes the film libraries of Viacom (NYSE:VIA) and Lions Gate (NYSE:LGF). It has benefited substantially from licensing deals from Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX).
In other words, MGM should have enough fodder to get the attention of IPO investors.
Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.
A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.
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