Could these be the final days of Six Flags?

[winningfreak]

Just ran across this:

 

 

http://www.forbes.com/feeds/ap/2008/09/25/ap5473234.html

 

 

Late Wednesday, Moody's (nyse: MCO - news - people ) said it does not expect Six Flags to create enough free cash flow or have sufficient unused revolving credit capacity to fund two upcoming obligations. Moody's said the shortfall may force the New York-based company to rely on asset sales or refinancing in a difficult credit market.

 

The mandatory redemption date for Six Flags' $287.5 million Preferred Income Redeemable Securities, or PIERS, is Aug. 15, 2009. Its remaining $131 million senior unsecured notes mature on Feb. 1, 2010.

 

 

Could this be the end of Six Flags? the stock is junk I was interested in it but am turning the otherway until I hear a plan that MIGHT save them...

[the ghost]

I doubt it. A huge park industry like 6 flags must have some kind of plan for this.

[ParkTrips]

^ Six Flags isn't crap compared to some of the giant companies that have fallen, both recently and in the past.

 

Who knows but they have been like the credit card user who barely makes minimum payments - eventually its going to engulf them if they don't act.

[Evan1127]

Credit ratings and defaulting on payments isn't directly linked to "the end" for Six Flags or any company. It's true that there may be some changes to try to prevent this from happening, but this doesn't mean they'll go out of business completely if they can't pay.

 

This is also a good chance to gamble on whether or not they can/will make these payments. The downgrade by Moody's is based on their opinion and is, by no means, fact. This has obviously driven the stock price down for worried investors. But if you disagree with Moody's opinion, the stocks can be considered very cheap right now and you can make a nice profit in the near future as the stock price changes to better reflect the true value of the company.

[mike robinson]

Bigger Companies than Six Flags will Fail...

 

"Discerning which firms will cave first is difficult, but S&P has identified 162 "weakest links," or companies in danger of defaulting over the next 12 months. It is the seventh straight month that the roster of credit-unworthy firms has grown. On that list are high-profile names such as United Airlines parent UAL, General Motors, Tribune, Six Flags (SIX), and Trump Entertainment Resorts."

 

 

Six Flags doesn't have a magic wand to save them. The debt is enormous. Do they even have enough assets to cover the debt? For those who think Six Flags can't fail because they are Six Flags, well that's the kind of thinking that got us in the mess we are in today. Somehow I don't think Six Flags is going to get an AIG type of bail out from the feds.

 

I don't think this means all the parks will close, but I do think we will see a very different Six Flags at this time next year.

[raptorcrew2002]

^ Agreed. Six Flags has no backup.

Sucks too because the company is finally being run in a good direction, only problem is little to late. Premier did the damage and spent like a little kid with his dad’s charge card.

 

Will they close, not likely. Either File for bankruptcy (Which they REALLY do not want to go that route, the vendor damages will be FAR and long lasting) or sell the company.

 

It seems like they really are trying hard to keep the company and I hope they find a way though the mess but with the financial issues pending I would say SF could fall victim to banking failures if anything first which does force them into a very tough decision.

 

Heck if BOA will not loan money to McDonald's for expansion (like we need more, right) right now, no one is going to loan a dime to SF.

[Capitalize]

I wouldn't be surprised to see more parks sold/scrapped before now and next summer.

[Loopy]

Yep, but who is going to buy? People are holding on tight to their money. I say it is the end for six flags. I made a few bucks by buying some when it dropped to to 75 cents a little while ago, and selling at 1.30, but I wouldn't touch it now for anything.

[winningfreak]

I just think there stuck between a rock and a hard place. there is not enough money for them to live and people wont be spending money for a while so attendance will be in the crappier till 2010 at least...

[FlyingScooter]

Six Flags is not in great shape, like most companies right now.

 

My question about this is simple: If they go Chapter 11/13, what happens to the pending lawsuit from the SFKK incident? I would hate to see that kid get nothing.

[AllenA07]

This doesn't surprise me in the least. Parks are very dependant upon the economy, when people have money they like to spend it on things like vacations to amusement parks. When the economy is failing people hold onto that money more carefully then they would have before, and for most people trips to amusement parks are an easy thing to cut. This is an industry that is going to always be based on how much spare cash people have in their pockets. Right now people's pockets are running low. Six Flags is a huge company, which means that in times of economic prosperity they're going to see more benefits then a smaller company. Likewise when the economy is down they're going to hurt more then a smaller company. The difference is that (to a point) Six Flags can take losses better then small companies that own only one park.

 

Do I think it would be out of the question that Six Flags does shed more of its parks? Not at all, in fact if the company can unload a couple of their parks and try to balance themselves right now it might not be such a bad idea. Do I think Six Flags is going to cease operation? No, the company is big enough that with a substantial sell off of certain assists (smaller parks, assuming buyers could be found) it should be able to weather this storm.

[winningfreak]

^ if a lot of people agreed with you then why are more people not interested In there stock?

[AllenA07]

I'm not exactly sure what you're asking or if I came off wrong, but right now I don't think people are interested in Six Flags stock. The economy is bad right now, therefore I think Six Flags is a risky investment.

 

On the other hand if it starts to look like the economy is turning around, it might not be such a bad idea to invest in Six Flags and see if that stock rises with the economy. However I think that is still some time off right now.

[thrillgeek]

There's still hope for Six Flags in my opinion. I mean just look at the housing market here in California. Just a few months ago the prices were outrageous! Now it seems they are finally coming back down and people are starting to buy houses again. The same should happen to Six Flags soon.

[FlyingScooter]

There's still hope for Six Flags in my opinion. I mean just look at the housing market here in California. Just a few months ago the prices were outrageous! Now it seems they are finally coming back down and people are starting to buy houses again. quote]

 

 

But that's part of the problem. The same thing is happening in NE Ohio with the housing market. The problem is: people trying to sell houses are taking a huge hit. Like this: you buy a house 200k, but the economy goes kerplunk and all of a sudden, you house is worth only 100k. would you sell and take a 100 k hit?

 

If you can get a loan, it is a good time to buy. God help you if you're selling though.

[gisco]

I'm always amused by threads like this. All the "Experts" are planning the the demise of SF. I wonder why the corporate execs at SF don't hire you guys because your such "Experts"

[FlyingScooter]

^LOL, good point.

 

 

Maybe they're just waiting for government bailout.

[Thom25]

^^ Very funny and true.

 

To think that the CFO of Six Flags has forgotten about or isn't aware of the February date is highly unlikely. I am sure they have a contingency plan, which may include bankruptcy as a last resort. They will survive either way, and the girl will go to the front of the line with their obligations.

[mike robinson]

It does not take an expert to pull your head out of the sand and look at numbers.

 

When Time Warner owned Six Flags they had a lot more business than Six Flags. (CNN, Tine Warner, and a bunch of subsidiaries) so losses could be spread around.

 

When Premier bought Six Flags they wracked up almost 300 billion in debt within a year. There was no where to spread the debt and it was entirely Six Flags.

 

Now the bills are coming due at a time when Six Flags can least afford it.

 

It does not take a genius to understand basic economics. Six Flags needs "experts" to tell them how to get out of this mess. Anyone with common sense can tell you what trouble kind of trouble they are in. But if you don't believe me, check out the financial experts like Moody's Investors Services, Standard & Poor's, Business Week, or any Financial news source.

 

Bottom line is just because you DON'T want something to happen doesn't mean it won't. It can and will. Its not just Six Flags but a lot of companies in this same sinking boat.

 

My best guess is Chapter 11, which would alow them to stay open and default of a lot of the debt load. Of course this would hurt anyone who owns stock or has a loan out to Six Flags, but at least Six Flags would survive.

 

Chapter 13 is too horrible to even think about.

 

As far as the little girl in Kentucky, I think the Insurance carrier will cover that despite what happens to Six Flags.

[RRollergod]

After seeing Six Flags stock start falling last year I knew it wouldn't be long. I thought they might crash before this though.

[Olsor]

I'm fully expecting Chapter 11, reduced season length, and reduced operating hours. Despite better performance, I don't think they've made a dent in the debt load under Shapiro. It was just way too much debt. I'm amazed they made it this far, actually.

 

I think most parks will survive, ultimately, but we'll probably start hearing the rumblings of bankruptcy get louder over the next few months.

[pgathriller]

Quite recently I bought a large sum of stock from Six Flags. I very well know of Six Flags situation and I very well know the risk I'm taking. I am hoping that Six Flags turns around despite the situation. I understand I purchased a major risk stock but it's going for really cheap right now. If Six Flags does indeed go under or anything It's not a HUGE lost. I am taking this risk in hopes that Six Flags makes a turn around. If it does than that's good news for me .

 

- Hoping Six Flags can make a turn around.

[Thom25]

^ I think we ALL want Six Flags to succeed and be succeed, or we wouldn't be coaster enthusiasts. With that said, I wouldn't have taken the risk, unless you are so well funded like Bill Gates, you can afford the loss. I hope you got the stock at a good price, while we all know the adage about a fool and his money.

[pgathriller]

^ I understand what you are saying but I did not purchase the stocks because I am a park enthusiast or just because I'm trying to help out Six Flags. I did it because the price is very low, and although I may be one of the few in the many I do believe the economy will improve and I also believe that Shapiro is doing a good job running the chain. I purchased the stock for under a dollar a share. Stocks are risky and I took the risk. Six Flags stock is a huge risk but I do believe Six Flags has a chance. If I lose my investment then I won't complain because I was fully aware of the risk I was taking. I do own my own business and I own 25% of another (which is an FEC). I do understand business and I do understand the risk I took. And to set the record straight, I am in no way saying that I believe Six Flags WILL make a turn around, I am merely going with my opinion on the situation and hoping things work out.

[AllenA07]

Quite recently I bought a large sum of stock from Six Flags. I very well know of Six Flags situation and I very well know the risk I'm taking. I am hoping that Six Flags turns around despite the situation. I understand I purchased a major risk stock but it's going for really cheap right now. If Six Flags does indeed go under or anything It's not a HUGE lost. I am taking this risk in hopes that Six Flags makes a turn around. If it does than that's good news for me .

 

- Hoping Six Flags can make a turn around.

 

I know it'll make me sound bad following my earlier comments, but I have been thinking really hard for the last couple months about putting some money into Six Flags. This is the time where it might be worth the risk to buy, seeing as how that stock is at really low levels. If I felt like I had a little more money to throw around I do think I would jump into the frey and invest some money on Six Flags now while the cost is low.