Amusement stocks take a dump, here's why

Despite the pessimistic headline, the article seemed quite positive about the industry as a whole -- even going so far as to say Six Flags will do okay, even if its shareholders won't. Only the indoor waterparks were singled out for concern.

There is one blessing of sorts for the parks in the current environment. A few years ago, we were worried about parks closing and being turned into housing or retail developments. The sectors doing the worst during this downturn include retail and housing.

Not much call for a new golf course when nobody can afford to pay the greens fees.

RatherGoodBear said:
There is one blessing of sorts for the parks in the current environment. A few years ago, we were worried about parks closing and being turned into housing or retail developments. The sectors doing the worst during this downturn include retail and housing.

"But we can ALWAYS use another strip mall!^$#^#$!@!!! " a lady at Beachwood Mall when she heard that mall might be closing.

Rathergood: You make a very good point. I was actually surprised when they announced they weren't going to build the mega-mall thing in Solon. When they stop building malls, the economy is very bad.

I found this statement to be a fascinating part of the article:

"We cannot grow at the rate I know we are capable of," Shapiro explained during Monday's conference call, "carrying this amount of debt."

"Enough is enough," he says. "The company is ready to fire once the noose of the balance sheet is cut away. Cutting away that constriction is in the best interest of all of our stakeholders. So we are exploring all of our options, and that's all we will say about that today."

Whether that implies a filing for bankruptcy reorganization, or the more likely route of a massive equity-diluting move to shore up a balance sheet sagging with $2.1 billion in long-term debt, Six Flags will be in good shape. Common shareholders may not be so fortunate.

Certainly makes you wonder what's on Shapiro's mind. He's really turned the company in the right direction. It's just that debt load is killing them, particularly with the credit crisis.

I think that SFA will be going down the drain. Unless they change.

But I don't rhink that SFA will ever change.

Come on, cut the "my poor home-park" crap. Six Flags already sold off the properties that they viewed as a drag on their resources. I don't have the numbers on SFA, but if it contributed to the cash flow, don't expect much to change, but do expect it to remain a Six Flags property.

I was surprised to see the debt load Cedar Fair is carrying. I knew they had debt, but its almost as much as Six Flags. Of course, we all know those $5 fries will pull them right out of that!

I find it ironic that Six Flags touts a change toward "family friendly" attractions after a wild, 10-year spending spree on scores of multi-million dollar super-intense B&Ms geared only for top intensity thrillseekers. (Many of the coasters were brazenly plopped down right next to each other in the same park, many featuring similar elements and sequences. )

For example, SF "jumped the shark" when they hurriedly pinched out Scream, a multi-million dollar B&M clone in a parking lot at SFMM leaving the parking lane markings clearly visible under the coaster.

For example, how many SFMM coasters have the requisite 360 loop after the initial drop? Batman, Riddler's Revenge, Scream, all brazenly plopped down next to each other, drunkenly defying comparison. How many SFMM coasters, for example, have Immelmans, corkscrews and other cloned elements, and in similar sequences?

What was Six Flags' reasoning behind spending so many millions on cloned thrill coasters without regard to diversifying the attractions to various target markets? To be honest, it raises suspicions about what motivated execs behind the scenes to do such a thing. What was in it for them?

When you compare Six Flags to Cedar Fair or Disney, SF seems brazen in their spending millions on homogenous steel coasters from one manufacturer, defying the logic of diversification and target markets.

Shares of Six Flags are now going for about 30 cents.

Bill said:
I find it ironic that Six Flags touts a change toward "family friendly" attractions after a wild, 10-year spending spree on scores of multi-million dollar super-intense B&Ms geared only for top intensity thrillseekers. (Many of the coasters were brazenly plopped down right next to each other in the same park, many featuring similar elements and sequences. )

What was Six Flags' reasoning behind spending so many millions on cloned thrill coasters without regard to diversifying the attractions to various target markets? To be honest, it raises suspicions about what motivated execs behind the scenes to do such a thing. What was in it for them?

I think what you need to understand is the execs who did that were ousted by the current execs and they are the ones touting the family friendly attractions and actually making the park cash flow positive again.

I agree entirely with your assessment of SF poor choices. Luckily, those guys are long gone.

Hey woah wait a minute! Gonch is agreeing with someone??! ;)