Casino Stockholders Reduce Stake 15 Pct

The two largest shareholders and most senior board members of Mandalay Resort Group have each disposed of more than 15 percent of their stakes in the casino operator this week, securities filings showed on Friday.



The selling began on Tuesday as Mandalay stock reached its highest level since October 2002, following the company's decision to begin paying a dividend, becoming the first major casino operator to do so.


The company owns the Mandalay Bay, Luxor and other casinos, making it one of the biggest companies operating on the Las Vegas strip. Chief Executive, Chief Operating Officer and Chairman Michael Ensign and Vice Chairman William Richardson had each disposed of around 800,000 shares of stock by Thursday. Sales prices were generally more than $33 per share, the filings showed.


Each began with just under 5 million shares and the latest filings showed that by Thursday Ensign was down to 4.17 million shares and Richardson was down to 4.19 million. Mandalay executives were not immediately available to comment on the sales.


Mandalay announced on June 12 that it would pay a dividend and analysts raised their ratings on the stock. The Las Vegas-based company became the first major casino operator to respond to investors calling for dividends after the U.S. tax on such payouts was cut to 15 percent.


Before the tax cut dividends had been treated as ordinary income and taxed by as much as 38.6 percent. Mandalay shares, which had been near $30 before the dividend announcement, rose to $34.63 on June 17. They closed at $32.76 on Friday, down 17 cents.