CNBC's Jim Cramer casino folly

Jim Cramer of "Mad Money" on CNBC suggested "to stay away from MGM and pick up rival Wynn Resorts" in November of last year. Wynn's stock was flying high when MGM Mirage's City Center was opening segments of the resort with its flagship Aria casino opening Dec.16,2009. Cramer has blown a call or two such as Jimmy The Greek did when "The Greek" proclaimed the New York Jets as 17 point underdogs to the Baltimore Colts in Super Bowl III. Many have bet against MGM Mirage's largest shareholder Kirk Kerkorian's visionary ventures before and wound up doing business shows on low rated networks.

Kerkorian's investment company Tracinda Corp. "is exploring the possibility of strategic partnerships or other alternatives with respect to its investment in MGM MIRAGE and believes there is substantial unrecognized value in MGM MIRAGE and CityCenter that is not reflected in the market value of MGM MIRAGE’s stock." Kerkorian won't pull the trigger on a deal until Aria opens and the word is that Dubai World will pull out of its 50% ownership of City Center leaving MGM with the option to buy it. Dubai World also owns 5.9% of MGM stock and it is possible that as a strategic partnership, Tracinda will land the sale of Bellagio and City Center subject to the approval of MGM Mirage's Board of Directors and shareholders. Kerkorian sent out a trial baloon in 2007 suggesting ownership of these two properties while unloading all his interest of MGM Mirage. The stock skyrocketed with this rumor and will again if this deal is cut, if history repeats itself.

Kerkorian has a history of buying and selling casino properties and knowing when to take the money off the table. He is ranked in Forbes as one of the top 100 billionaires and still hasn't lost his fastball regarding business. Many would like to see his fall including Cramer, who can't count cards in "the house of pain" for a profit at blackjack. Maybe Cramer is playing with "smart money" by bad mouthing MGM Mirage and was facilitating its low price at $10 while loading up on the stock in November 2009. MGM Mirage stock closed at $16.41 on 5/3/10 for a 64% increase since Cramer's November 09 proclamation.