FUN tanks 22% in one day

Here's Rick Munarriz' (of Motley Fool) take on FUN's drop last week.

"But now let me get into some relative losers -- stocks that shed more than 18% last week -- that I think will bounce back quicker than the market.

Cedar Fair's plunge is a head-scratcher. Last month, the company announced that 2008 revenue inched 3% higher through Labor Day. This is a seasonal business. Save for a few Halloween weekend events, all but one of its parks are essentially done for the year. They don't reopen until late springtime. If we head deeper into an economic downturn and bounce back before next summer, Cedar Fair will have artfully hibernated through the lull."

I guess the assumption is that when times are tough and money is hard to come by, entertainment is one of the first things to go. But even during the Depression in the 30's, people still went to movies and ball games, jazz and big bands caught on like wildfire. Life didn't stop then, so why assume it will stop now?

RatherGoodBear said:
Here's Rick Munarriz' (of Motley Fool) take on FUN's drop last week.

You know, of course, that you could've just read this very thread for his take too, right. :)

Paris == Rick Munarriz

Crazy ride... up 19% to 16.55 today. It's not a full recovery from the last few weeks, but it's a start. All of the big indexes were up 11% today. I can't remember the market ever being this nutty.

Yep, I'm a Fool.

And the beauty of Cedar Fair going into hypersleep for the next six months is that gas prices may be materially lower by the time the 2009 seasons rolls around.

Crude oil has been dropping sharply and it's just now working its way into the gas pumps. Even if the econmy is still tanking by next summer, folks will still escape to nearby entertainment outlets. Heck, even Great Wolf had a decent summer, and you'd figure that folks paying $400 for a night at an indoor amusement park would be the first one to shake their heads.

Paris said:
Heck, even Great Wolf had a decent summer, and you'd figure that folks paying $400 for a night at an indoor amusement park would be the first one to shake their heads.

Of course, that kind of thing doesn't surprise some of us. ;)

you'd figure that folks paying $400 for a night at an indoor amusement park would be the first one to shake their heads.

Actually, I think it is exactly the opposite. Folks at that end of the discretionary income scale aren't really being touched in a serious way by gas prices, because it still makes up such a small fraction of their spending.

The stock market might get them to take notice, but not so much the gas pump.

Lord Gonchar said:
You know, of course, that you could've just read this very thread for his take too, right. :)

No, because that would assume I actually read profiles, know who all the game pieces are, and stuff like that.

On the other hand, maybe I could let my fool subscription lapse. :)

RatherGoodBear said:
No, because that would assume I actually read profiles, know who all the game pieces are, and stuff like that.

You need to know the rules before you can play the game. ;)

Nah, the only reason I knew is because we had him on the podcast a while back.

I think it's pretty awesome that you can interact with a mind like that around here. :)

Oh so now you're expecting people to listen to those podcasts? When will it ever end? :)

kpjb said:
I think the biggest thing to remember here is that Cedar Point just got that truckload of wood delivered. I'm sure when the news of that leaks out that the stock will skyrocket...

I told you!!! :)

^ - except that the news leaked last week (see the blog) and the stock tanked. So there goes that theory. ;)

I'm not really sure why I never saw this before, but CNBC's Jim Cramer was bullish on FUN September 5. That could explain why it's in the toilet a month or so later! :)

http://www.cnbc.com/id/15840232?play=1&video=845726628

Truthfully I think Cramer is a huge blow hard and the average investor gains little by listening to him, but this analysis wasn't half bad. His basis for being bullish was declining gas prices, but he also addressed some of the reasons why even with their big debt load, CF was still pretty safe based on historical attendence and revenue trends. He even talked about loan covenants and stuff too.