07/24/2002 11:00PM

Magna stock declines again


NEW YORK - Stock in Magna Entertainment closed at $4.46 on Thursday, down 30 percent since the company announced a deal 10 days ago to buy majority interests in the Maryland Jockey Club's two tracks, Laurel and Pimlico.

The drop in the stock price, which has come in an intensely volatile market, has put Magna's shares at a 52-week low. Magna stock has traded as high as $10.25 in the past year. On Thursday alone, Magna's shares dipped 29 cents, or 6 percent.

Magna announced on July 15 that it had reached a deal to buy a 51 percent interest in Pimlico and 58 percent interest in Laurel for $50.6 million. Magna also paid two minority partners in the track $18.4 million for options to buy the partners out in 2006. That day, Magna's stock opened at $6.44, but closed down 39 cents.

Some analysts criticized the deal for overvaluing the tracks. Also, Laurel and Pimlico need millions of dollars in renovations.

Eric L. Hausler, an analyst with Bear Stearns, which underwrote a recent stock offering by Magna, said recently that the stock price's decline is typical for a company that has just announced an acquisition.

"Any time you have a purchase like this, that represents a use of cash," said Hausler, who recommends buying Magna stock. "So it's typical to see the stock fall right after the announcement as people sort through the deal."