Yikes!! SF stock falls again.

sws's avatar
Excuse me for double posting.... Looks like SIX dropped an additional 14.7% and is now down to $3.25 per share. I retract my earlier statements that this may just be a reflection of a volatile market period. I now think the Six Flags plane is heading into a nose-dive from the turbulence. "Attention passengers, this is Pilot Shapiro. Please keep your seatbelts fastened for the duration of the flight. We're heading for a crash landing into the land of Chapter 11."

Although I think Shapiro's plan may work over the long haul, the debt on their balance sheets is pulling them down. I would not be surprised to see them file for Chapter 11 within the next year. I found this to be an interesting article:

http://www.thestreet.com/_aol/s/balance-sheets-the-good-the-bad-and-the-in-between/ *** Edited 8/2/2007 5:18:25 AM UTC by sws***

Yes but how do youy expect them to get rid of that huge debt? That cant lower prices .They can only make the service better. The problem is that investors are VERY impatient .

They dont see the fact that the parks are starting to gain peoples respect again slowly.

Its just like what verizon is seeing. The investors dont like the fact that verizon is spending all this money overhauling their network even though verizon HAS to do it to stay afloat.

This is a great time to buy six flags stock though as a long term investment. Heck even if it goes up to $6 that still would be a 3 dollar increase. *** Edited 8/2/2007 11:40:31 AM UTC by majortom1981***

It will be difficult for Six Flags to avoid bankruptcy unless they can improve cash flow in the near term . Shapiro has to be able to either grow revenue or slow expenses (or some combination of both) . His strategy of raising prices has increased per head spending but has conversely seen attendance drop by 3 plus million . At the same time he has built up a huge corporate overhead with scores of new highly paid executives , new Times Square offices , increased advertising costs , etc. . Shapiro needs to take a lesson from CedarFair and run a much skinnier corporate overhead and focus his expense dollars at the park level .
I think SF needs to operate their corporate headquarters from SF America!! (similarly to CF and CP)

It's close to Mr. Danny, operations will be cheaper, and then maybe SFA would actually run correctly...well, maybe...

Would you buy stock in the company?

I wouldn't. Adding Tony Hawk coasters to SFStL & SFFT isn't going to get a lot of people in the parks. SFGAdv, SFGAm, and SFMM are the only big parks they fully own (SFOT and SFOG are owned partially). The Great Escape was below a million. I don't have up to date figures, but I have the park below a million.

SFA is run badly. SFOG has had the beating near the park, and other stuff. SFNE sounds like it's run bad. American Adventures doesn't have many rides, and it looks like it gets 10,000 people a year.I don't like the rides at SFKK. Operations didn't seem bad when I went there. It sounds empty through trip reports. And we have SFDK as the last American park. It looks nice, but it doesn't have that many coasters. I have no idea how that Safari park is doing. It's just a drive bye.

Six Flags Mexico charges really cheap, and thus it has a lot of attendance. Discounts with a $35 ticket to get in is ridiculous. Who knows about La Ronde? SFOT waterpark looks bad even though it does get some attendance. Waterparks just don't get the attendance theme parks do though. I don't know about Magic Mountain's waterpark, or SFGAdv. They are only waterparks though.

They are probably getting 400,000 people which isn't much. SFNO is done, and it's probably never going to open again.

I wonder how well Shapiro is holding up...the man must we sweating more and more each day. I recall him saying past management would always blame bad weather in reports and if you all carefully read some of the latest updates, Shapiro definitely isn't hesitating to use that as an excuse as to why some of the markets aren't up to par.

I'll wait until the stock drops to $1.50 before I'll start picking up shares. Anybody want to bet on around September?

Jeff said:
Premier bought Six Flags long before they changed the name.

Did anybody say otherwise? No.

*** Edited 8/2/2007 5:59:22 PM UTC by kRaXLeRidAh***

I say just wait and let Shapiro handle it. I think its good he is putting overall park experience over his shareholders because it will eventually pay off.

Bolliger/Mabillard for President in '08 NOT Dinn/Summers

Audioslaved said:
I say just wait and let Shapiro handle it. I think its good he is putting overall park experience over his shareholders because it will eventually pay off.

I think he can handle it too. The turn around in terms of happy employees (minus all the ones who are doing it with obvious sarcastic overtones) and putting costumed characters in the park - it's really amazing.

Still a LONG way to go with general operations though. Needs to take some BIG lessons from Holidayworld. Free drinks (dont forget the gatorade and caff free stuff) would make people talk and return.

Still so much freakin cheap admissions. And stop babysitting so many spitting humping gay joke cracking mall bought ac/dc shirt wearing teenagers :) That would improve my visit!

OH yeah :) And stop the continued separation of classes and further banging over our heads to importance of american greedy capitalistic hallucination with stuff like Flash Pass and preferred parking.

That doesn't feel good to a single mom, who can only manage to take her kids once a summer, as their main vacation. Watching priveleged people run up to the front of the lines on the coasters... bullsh*t.

Jeff's avatar
Snyder is not going to let his investment wither on the vine. I agree with the recent analyst who said buy. I'll buy a couple hundred bucks if it levels out. Why not?

Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

sws's avatar

Spinout said:
Would you buy stock in the company?

Well that's the interesting question and no one knows for sure. A week ago I was seriously considering dropping some big change on the stock. Now I'm hesistant. If I could predict the market, I'd be retired in the tropics going diving and sailing every day. That ain't happened yet. :(

The big issue is whether Six Flags can turn itself around soon enough to avoid Chapter 11 bankruptcy court. I think Shapiro's plan is a good one and will help in the long term. However will it happen soon enough to prevent SF from seeking protection from its creditors? What's killing Six Flags right now is its huge debt. By selling off several parks, it helped its debt structure. Unfortunately, I don't think it was enough.

I'm thinking five years from now SF will be doing OK for itself. However, I'm afraid it will require restructuring of its debt while in bankruptcy protection to turn the corner.

If you think SF can avoid bankruptcy, buy now. It's a cheap bet. Personally, I'm going to wait to see how the 3rd quarter numbers look. In the meantime, I'll sit here freezing in the tundra, while dreaming of the tropics.

Jeff said:
Snyder is not going to let his investment wither on the vine. I agree with the recent analyst who said buy. I'll buy a couple hundred bucks if it levels out. Why not?

What do you think Shapiro can do (that he hasn't already done) to pay down that debt? At best he has staved off BK for another year, but the basic fundamentals have not changed. They have HUGE debt, that isn't being paid down by the CASH coming in from current operations. That's fine for a while, as the largest chunks of the debt aren't "due" until a few years from now.

However, when that time comes and they can't pay down the debt, but instead have to refinance AGAIN, at higher rates, then what happens?

He'll be hard pressed to explain to someone that SIX was still sitting on 100% of the debt used to pay for those crazy two years (2003-4) of multiple coaster expansions at their big parks.

Weather in the US this year has been exceptional in all major markets (Magic Mountain has been relatively cool, few days in the +100s), New Jersey has been primarily dry, as has Chicago. Given that, you would expect exceptional attendance levels at the money maker parks. However, I think the industry analysts have already figured out that the hole is too deep, and nothing short of a reorg will solve the problem. That's why the stock is where it is. *** Edited 8/3/2007 2:12:19 AM UTC by CreditWh0re***

Jeff's avatar
The debt is one component of the company's financial picture. Borrowing money is part of business, and they'll always have some amount of debt. Who cares? It's only a problem if they can't keep up with the covenants they have.

Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

Isnt he making more money than the last guy there? If so maybe he should have his salary cut in half, even though he doesnt deserve a paycut but it might do something to show he is serious about turing around the parks.

Bolliger/Mabillard for President in '08 NOT Dinn/Summers

Jeff's avatar
The guy wouldn't have left his job at ESPN so he could walk into a difficult situation and get paid less.

Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

Don't EVEN get me started, J7G3.

I'm all for the stock price lowering if it means that they put money where it belongs and start running the parks with a quality experience in mind. It just doesn't look like the company will ever get out of debt.

Couldn't they just find a debt consolidator like individual people do? Or maybe the U.S. Government could bail them out somehow.

I really wouldn't want my tax dollars bailing out SF either, but that doesn't stop our government from spending it on non-essentials anyways (like war, for example).

I was just brainstorming for a solution to SF's situation, which I feel can only get worse.

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