Six Flags Corporate Discussion Thread

P. 156: Mike Spanos to become President & CEO of Six Flags
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Re: Six Flags Corporate Discussion Thread

Postby Haymaker » Thu Mar 05, 2020 9:06 pm

Timh121 wrote:Think they'll survive this? It'll be terrible for the industry if they went belly up.


Why do they always seem to get in a financial mess after they pick up Darien Lake? At least they dont own the place right now so it wouldnt be as bad as the last time they dumped it.

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Re: Six Flags Corporate Discussion Thread

Postby Rollercoaster Rider » Fri Mar 06, 2020 4:45 pm

Haymaker wrote:
Timh121 wrote:Think they'll survive this? It'll be terrible for the industry if they went belly up.


Why do they always seem to get in a financial mess after they pick up Darien Lake? At least they dont own the place right now so it wouldnt be as bad as the last time they dumped it.


Technically, They got Darien Lake in 1995
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Re: Six Flags Corporate Discussion Thread

Postby Haymaker » Fri Mar 06, 2020 7:57 pm

Rollercoaster Rider wrote:
Haymaker wrote:
Timh121 wrote:Think they'll survive this? It'll be terrible for the industry if they went belly up.


Why do they always seem to get in a financial mess after they pick up Darien Lake? At least they dont own the place right now so it wouldnt be as bad as the last time they dumped it.


Technically, They got Darien Lake in 1995



Well yeah, its just happening quicker this time :lol:

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Re: Six Flags Corporate Discussion Thread

Postby KBrylczyk » Wed Apr 01, 2020 8:48 pm

Interesting bit of news regarding financials and all the fun stock market madness -

https://investors.sixflags.com/news-and-events/press-releases/2020/03-31-2020-213020263

Thanks to all this virus silliness many companies are being tested financially, some moreso than others. Six Flags, in particular, seems terrified that they'll be gobbled up by another entity or entities as their share value continues to go down faster than a Thai hooker.

According to this Rights Plan, if any one person, or group of people acting as one, purchase 10% or more of the company's stock (percentage of ownership for the layman) then it will trigger an immediate 50% discount on the remaining shares to be purchased by existing stock holders. The idea being that current stockholders will act in good faith to buy more stock in order to dilute the 10% buyer away from controlling amount of shares.

Hypothetical example -

Bill Gates wants to dive into the amusement park industry. Disney and Universal are too strong to compete with directly and too expensive to bother buying out. Cedar Fair and Six Flags, however, are much more approachable to a man of his background. Six Flags ($11.41) is trading at about 65% the value that Cedar Fair ($17.05) currently is, making it the more attractive of the two options. He purchases 15% of the company stock at $11.00 (rounded down from the current price for the sake of argument) which then allows any and all existing shareholders to purchase more shares at $5.50. Because of this, on paper Bill Gates' stock is essentially worth 7.5% (theoretically) if this triggers a surge in buyers. Because of this, Bill Gates will have second thoughts about buying Six Flags and might instead look at Cedar Fair because he'll get more bang for his buck.

This is an extremely simplified example of what could happen, but this is essentially Six Flags throwing out a lifeline to themselves. It will be very interesting to see what happens a few months down the line. With the current economic climate I wouldn't expect any kind of buyout or hostile takeover but I am fully expecting Six Flags to unload a bunch of their underperforming parks and standalone water parks.
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Re: Six Flags Corporate Discussion Thread

Postby sfkk » Wed Apr 01, 2020 9:03 pm

^ They don't own many of the smaller parks they just re-aquired, so there is not really any money there. Hate to say it, but if it really got that dire Magic Mountain could be on the chopping block again. The property value for housing there is worth basically the value of the entire Six Flags chain rn. Shapiro was extremely close to pulling the trigger on that many years ago. Six Flags America also has high property values relative to its rumored income. I don't expect it to come to this at all though. Spanos has made it clear that the parks are the core business, and at the end of the day they are the only things that are going to keep them afloat. So in that respect, as long as they are all profitable to some extent, more parks is better. With that being said there is a lot of financial stuff under the hood with loans coming due and leveraged spending that I don't understand that could play a role as well. I wish SF would just start a savings fund instead of always using profits for stock buybacks. If they invest in the parks and operate a sound and honest business model, they are likely to see success IMO. Think Holiday World.

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Re: Six Flags Corporate Discussion Thread

Postby ytterbiumanalyst » Thu Apr 02, 2020 12:08 am

Seems like a solid defence against a hostile takeover.

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Re: Six Flags Corporate Discussion Thread

Postby Jew » Thu Apr 02, 2020 1:28 am

Cedar Fair, Six Flags, and Sea World all took giant hits to their market caps. There will likely be consolidation somewhere in the industry between those three.
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Re: Six Flags Corporate Discussion Thread

Postby RaceBoarder » Thu Apr 02, 2020 5:48 am

Is this similar to how things were playing out in 2007-2009?

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Re: Six Flags Corporate Discussion Thread

Postby Superbatboy » Thu Apr 02, 2020 10:19 am

The amusement industry is going to take one of the hardest hits from this. Sad for the industry we all love
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Re: Six Flags Corporate Discussion Thread

Postby SoCalJasonland » Thu Apr 02, 2020 3:03 pm

RaceBoarder wrote:Is this similar to how things were playing out in 2007-2009?


Well, in the last great recession, oil/gas prices suddenly dropped, the market tanked, interest rates dropped, and people stopped paying their mortgages. So, basically yes, pretty much the same so far but who knows how quickly things will recover this time. Six Flags also has more debt than their properties and depreciated improvements are worth, so a negative price to book ratio doesn't help. My biggest fear is that if their credit rating downgrades too far; they will sell Magic Mountain for the land value.
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