Six Flags: It's Fly or Die
Let's say the price of six flags stock were $X per share right now.
If it were really the case that everyone who bought six flags stock wanted to keep it, then the price would go up---someone who wanted to buy at price $X would find no willing sellers (because everyone wanted to keep it to avoid "selling low"). Then, they'd have to offer $X+something to get the share they want, raising prices.
Instead, the stock price keeps falling. Translation; the person who wants a share doesn't have to pay $X, because there is someone else so desperate to sell that they're willing to take $X-something for it instead, undercutting the market and lowering the effective share price.
Falling stock prices do *not* indicate shareholders are holding the stock waiting for it to go up. It indicates shareholders are selling the stock fater than prospective shareholders are buying it.
There's a reason that more people want to sell than buy: from a financial perspective, the company sucks. There may (or may not) be lots of operational, customer service, or capital expenditure planning reasons why the financials get worse every year. At some level, it doesn't matter: consistently falling stock prices relative to other players in the field are a signal to management that investors *as a whole* believe they are doing more wrong than right.
(Edit: darn typos)
*** Edited 2/2/2005 10:31:37 PM UTC by Brian Noble***
Says the kid not old enough to buy a beer.
cyber_demon said:
Mr. Noble, your knowlege of the stock market is very vauge and amature.
Jeff - Editor - CoasterBuzz.com - My Blog
I'm sure if you checked the volume daily, you'd find that not every transaction is people dumping or selling their stock. I'm sure you can find someone, somewhere, who's actually buying SF stock on any given day. Would I be one of them? No. And also obviously, some current stockholders are holding on to their investment, even though it appears to be going south.
I'll even state that there's probably a few people who say "Wow, that stock's only 4 bucks a share! What a great deal, I should buy some," without checking out what they're getting into.
A question was asked why more stockholders haven't unloaded their stock. I was just offering some possible reasons why a stockholder would continue to hold onto their stock, even while its value was declining. Maybe those stockholders are people who don't understand how the market works.
you'd find that not every transaction is people dumping or selling their stock. I'm sure you can find someone, somewhere, who's actually buying SF stock on any given day.
Well, of course. Because you can't sell a share unless someone agrees to buy it from you. There are a fixed number of Six Flags shares out there (absent splits, new issues, and acquisitions-by-exchange)---they don't magically appear and disappear. So, *every* seller has a buyer, and vice versa. Even in the case of buybacks, there is always a seller and a buyer; in these transactions, the buyer happens to be the company itself.
"Six Flags, Inc., a small-cap value company in the consumer services sector, is expected to match the market over the next six months with above average risk... The most recent quarterly earnings report was significantly higher than analysts’ consensus forecast. Positive"... from Stock Scouter, a stock rating summary found on msn.com. Stock rating 4 out of 10.
Shares Outstanding: 93,042,000
P/E Ratio: 0.00
EPS: -4.91 (earnings per share)
Earnings Estimate: -1.24 (this quarter)
In other words, the sucker isn't making money.
From Netscape.com... 8 brokers analyze the stock, with the following recommendations:
Buy (2), Hold (2), Sell (1), Strong Sell (3). Overall recommendation is to hold. Among those covering the stock are "reputable" brokers such as J.P. Morgan, Smith Barney, and Prudential, although the site doesn't say which brokers recommend what.
The point of all this boring ass gobbledy-gook is that for all the operational problems mentioned on this site at each and every Six Flags park, there are people out there who think it's still a great company to invest in, and make a profit on as early as this summer.
I'm not defending these forecasts one bit, because with everything I read in here, I just don't see how things are going to turn around in such a short time, if at all. I'm just saying that there are enough people who believe it will happen and are going to hold onto their stock, even while it continues to lose value.
I'd just like to know what these experts and analysts are seeing to make them think this company will turn a profit anytime soon.
Other people are just amazed because it seems like it would be so easy to turn this company around. With the price of land and the lack of it, there will never be another SFI. There is an amazing amount of potential with what they have and in the 5/10yr future could bring some serious money in the stock market if they just DO SOMETHING!! *** Edited 2/3/2005 7:18:24 AM UTC by MrX***
ShaneDenmark said: My home park, SFDL, has hardly any merchandise for SFDL. Sure, it SAYS Darien Lake, but the pictures are mostly of SFMM, SFOT, or SFGAdv. Even their photo booth has SFOT's Superman Tower of Power as a background choice. Is it like this at other SF parks, too?
I don't remember any shirts at SFOT with a picture of STOP on it, BUT...
This past season they did have nice T-shirts with a lovely picture of Carowinds' Thunder Road on them. The Paramount logo on the front of the train showed up really well on that Six Flags shirt.
I've seen T-Shirts at SFOT with a number of different coasters on them, often not one of ours.
Some of Six Flags Over Texas' Titan shirts feature that same picture. Two years to redesign the shirt with a Goliath picture, and we still get the SFDL Superman/Predator/Skycoaster shirt. Go figure. :)
RatherGoodBear said:
I'd just like to know what these experts and analysts are seeing to make them think this company will turn a profit anytime soon.
Let's see. You have a company with a huge amount of debt and a history of financing through equity (the preferred "PIER" shares) and the likelihood of tapping the market in the future just to survive. Because the same companies issuing the ratings are the ones who will be hitting the company up to serve as underwriters for secondary offerings, being nice has its benefits.
That said "hold" is NEVER a good rating in Wall Street. When you go from Stong Buy to Buy -- that is also a knock.
Six Flags, run right and performing well, may be worth many times over its current price today. Yet I don't see analysts being upbeat at all. Only 2 of 8 have buy ratings -- and none of them strong buys? Not good.
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