Morgans Hotel Stock Slips in Trading Debut
Its luxury hotels may attract the hippest crowds, but shares of Morgans Hotel Group Co. didn’t attract hordes of buyers on its first day of trading.
Stock of the New York-based company, which owns stakes in nine luxury hotels, slipped 11 cents to $19.89 on Tuesday on Nasdaq. Investors paid $20 a share in the initial public offering Monday.
The company sold 18 million shares of stock at the midpoint of its expected price range set by underwriters Morgan Stanley and Merrill Lynch & Co.
Morgans, which trades under the ticker symbol MHGC, owns the Delano in Miami, the Mondrian in Los Angeles and a 50% interest in St. Martins Lane in London, among other hotels.
The company’s roots go back two decades, when Ian Schrager, founder of the former Studio 54 nightclub, opened Morgans hotel in New York. Schrager resigned in June but remains a consultant.
Despite hotel properties that attract celebrity guests such as actor Matthew McConaughey and singer Barbra Streisand, and room rates as high as $1,000-plus per night, Morgans has reported years of net losses and has a significant net deficit.
