Six Flags: Next Stop is Bankruptcy?

[GADVwow]

Well, this ought to generate some discussion.  Remember, this is just an opinion piece, and I am just posting it, without comment for now:

http://seekingalpha.com/article/53717-six-flags-next-stop-is-bankruptcy?source=yahoo

[coastermom]

Well we all know he has the wrong opinion.      If anyone was at FF the last few weekends of the season then  you would have to agree.  Maybe SF should sell off some of it's not so profitable parks but never GADV .

[WadeJ]

I usually don't play the conspiracy theory crap but then Geauga Lake happened.

What if...

Perhaps, this was Red Zones initial goal all along.  Completely devalue all of the properties by using a plan they know didn't fit their market place but would still look good in courts and on paper to the shareholders?

I think somebody needs to start looking into what friends Daniel Snyder has in the real estate market.  This isn't much different than Corzine still having friends at Goldman Sacks that would benefit from his completely insane asset monetization plan for the turnpike...

Selling off land is a bad idea at any park and most importantly Gadv.  Not because they need it for rides either.  They need it for a barrier for the not-in-my-back-yard neighbors that complain.  And then expansion.  For the record, Gadv IS singled out in the earnings report web cast for having some excess land that COULD be sold off.

Bankruptcy has been my fear all along.  The bigger question now is whether or not this was the intention all along because there is NO reason for why the stock has been tanking as bad as it has which just smells bad to me.  While performance has sucked, it hasn't justified the slashing we've seen.  Just look at Cedar Fair!

[Dubya91]

Now what happens if we bottom out and go bankrupt? :O :?

[peterpjr]

Having been through two bankruptcies with my full time employer, I can tell you they are not fun.

[overlord]

Bankruptcy = Gadv + Closed forever?

[peterpjr]

A bankruptcy does not necessarily means a business will close.  My company has gone through two of them since 2001 and we are still around.  I don't think SF is planning on doing this. Why would they spend all this money into puting new attractions into their parks if they were planning on going into bankruptcy.  It does not make sense.  They are in the middle of a transformation plan and it takes time.

[GADVwow]

Quite frankly, I think the author of the article posted has an axe to grind, and may well have shorted the stock.  Debt payments in any degree are several years down the road.  Were I Snyder and Shapiro, I'd be more worried about a hostile takeover than bankruptcy right now. 

This stock is a chance to make a killing, or lose every dime you have.  The prospects of either are much greater than for most stocks.  Yes, there are such things as stop-loss orders, but sometimes they work, and sometimes they don't!

With the chance of greater reward comes the chance of great loss.  It's called risk, and this thing has lots of it.  It's going to be an exciting ride.

[WadeJ]

Quite frankly, I think the author of the article posted has an axe to grind, and may well have shorted the stock. 

This is exactly what I've been thinking all along.  But it seems nearly all mainstream media has a beef with this stock now.  I think Cramer was one of the only few to support it; and that was only briefly.

And remember buys - I was only speaking hypothetically.  Personally, I think this guy is whacked...  Like Disney when it was underperforming, its a prime canidate for a take-over.  If they don't turn it around fast, we'll be changing owners hands AGAIN and this would happen LONG before bankruptcy happens.

[GADVwow]

I have always found the silence of Bill Gates to be deafening....I believe he still owns a substantial position in Flags through his investment company. . .

[PcMan]

This looks positive

"expects full-year revenue to come in above year-ago results."

And the weather to me looked better in the 4th quarter (Oct-Dec.)
At least in the Northeast Warm and dry.In the call they did say they will not be selling off assists.
They have a plan and sticking to it.
They have 3 years to tackle this debt.

So i would think the stock will trend up from here out

How bout it Mr. Gates add to your positions at this low cost

[darkridedan]

     It doesn't look like Six Flags is purposely heading for bankruptcy. Their plans for next season seem to benefit long term results over short term gains. They could have added nothing at all if they were looking to devalue the land. If he's only looking at the short term losses, it's not going to make sense where Six Flags plans to spend their money next season.

     Six Flags is building two of their Dark Knight coasters at parks which have mouse coasters. Mice coasters are synonimous with family coasters like mine trains and wooden coasters. SFGAM has Whizzer and both parks have two wooden coasters. Red Zone would like to attract more of the family demographic to the Six Flags parks. However there are other Six Flags parks like SFGAdv and SFMM which have ride collections which are more problematic to attracting families.
   
    SFGAm and SFNE have large collections of family flat rides. Six Flags may have to rid of most of the older flat rides when repairs become too costly because parts are too hard to find. The Dark Knight coasters might make a dent in the capacity lost by flat rides but they are low capacity rides. SFNE and SFGAm also have in-park water parks while other Six Flags parks with smaller flat ride collections have seperate addmission water parks. While SFNE and SFGAm still have large family ride collections, it makes long term sense to test the Dark Knight coasters at these two parks which could easily downsize their flat ride collection or charge extra for their water park attractions. Although Shapiro said he liked in-park water parks, Six Flags has made the Wild Safari Animal Park a seperate addmission park again.

     SFGAdv needed to add The Dark Knight because the addition of Houdini, Blackbeards and Jolly Roger will have occuried 9 years ago by the time the coaster opens. In that time, Six Flags removed 11 of Great Adventure's family rides without replacing them.

     Here is the part that could be sending stockholder's stomachs through more sumersaults than a Six Flags multi-looper and it may explain the stock price. The fear of adding these Dark Knight type of coasters is that they are easier to transport. Should bankruptcy lead to closure, these coasters are a better buy for a small park owner who could move them to their new home. (Most large parks have their share of what Six Flags has built in the Time Warner and Premier era. Purchacing old Arrow mine trains and loopers seems unlikely. Secondly, if the parks remain open, would Six Flags remove "low volume" wooden coasters? All Six Flags parks have one older wooden coaster which has been neglecting the past 20 years. Shareholders are probably not sentimental but it makes more sense to rehab an older family ride with great capacity rather than build a new one with low capacity.

    I think stock holders would like to see the amusement parks make more money and attract more people before worrying about partnerships and diversification. Additions of flat rides at SFGAdv, SFMM and SFoG would give me more of a reason to buy Six Flags stock over this talk about Six Flags TV and "ADS ADS ADS!" Watching tv is not the reason why people come to amusement parks. Six Flags needs to walk and chew gum at the same time.

[Majortom1981]

Didnt the Dick Clark Productions buy out use up a big chunk of the companies money? Will we have to wait till next year  to see how that helped or hurt the company?

[chilled182]

Wade, do you think he is really that evil?

I usually don't play the conspiracy theory crap but then Geauga Lake happened.

What if...

Perhaps, this was Red Zones initial goal all along.  Completely devalue all of the properties by using a plan they know didn't fit their market place but would still look good in courts and on paper to the shareholders?

I think somebody needs to start looking into what friends Daniel Snyder has in the real estate market.  This isn't much different than Corzine still having friends at Goldman Sacks that would benefit from his completely insane asset monetization plan for the turnpike...

Selling off land is a bad idea at any park and most importantly Gadv.  Not because they need it for rides either.  They need it for a barrier for the not-in-my-back-yard neighbors that complain.  And then expansion.  For the record, Gadv IS singled out in the earnings report web cast for having some excess land that COULD be sold off.

Bankruptcy has been my fear all along.  The bigger question now is whether or not this was the intention all along because there is NO reason for why the stock has been tanking as bad as it has which just smells bad to me.  While performance has sucked, it hasn't justified the slashing we've seen.  Just look at Cedar Fair!

[darkridedan]

... using a plan they know didn't fit their market place but would still look good in courts and on paper to the shareholders?

Wade I missed that part of your quote on my first read through. I wonder why Snyder hadn't begun building dark rides which could lengthen the operational season, grow the demographics and create a stronger brand through variety... in the long run. Introducing the darkride to a public so used to seeing new coasters every couple of years by marrying it with a coaster may make him as sly as a fox.

In the short term, I can't understand why he wouldn't want to announce the addition of flat rides at his flagship parks. SFMM might loose 3 or 4 more coasters. That can't be good to an investor's ears unless Snyder plans to replace those losses with something better. Four rides have already fallen at SFGAdv under Snyder and a fifth is for sale. If any park were to loose 18 adult rides in 8 years, we would think it's days were numbered. Why wouldn't he think investors think the same? The losses of most of those rides were not under his watch but why continue the trend? Why doesn't word of mouth work both ways when it comes to big business? 

[WadeJ]

Didnt the Dick Clark Productions buy out use up a big chunk of the companies money? Will we have to wait till next year  to see how that helped or hurt the company?

I forgot all about that LOL  We'll have to see how that happens.

Do I think he is that evil...honestly, no..... if you meant Shapiro.  If you meant Dan Snyder then yes, I do lol

Dan, you also mention the ability to easily uplift these new coasters and sell them off which is another interesting point.  Are any of the NEW coaster installations as permanent as say Nitro?

Now one thing that went through my mind when writing my review of BGA was the obvious lack of flats.  Are parks like BGA or BGE that different?  Should we have fewer rides with less overall cost for operations but with higher capacity.  If this is where he is heading then I'm gain.  But I'm just not sure how he can sell it to the public since they seem convinced a new coaster is the only reason to go back (gee, wonder why lol).  We need a massive omni-mover type dark ride with interactive capabilities to crank up the PPH and to replace these horribly missed flat rides.

[Bubba Z]

Are any of the NEW coaster installations as permanent as say Nitro?

^ Evel Knievel is one .

[WadeJ]

crap lol

[darkridedan]

Bubba I thought you were making an evil pun.  

Evel Knievel is kinda small for a coaster.

[GADVwow]

And I thought Wade was making an evil pun!

Cedar Fair and Six Flags share one thing.  In each's capital improvements press release, there are parks left out ... Kings Island, for one, at Cedar Fair, and America and Kentucky Kingdom at Six Flags...

[Bubba Z]

Evel is 100 feet longer than J2.  Yes short, but the ride description sounds awesome ...

A daredevil's dream, the 2,700-ft. ride experience begins with an 80-ft. first drop at a 90? left turn angle, which is answered with a 55-ft. double down drop. Sixteen hills follow with camelbacks, a 40-ft. fan curve and multiple high-banked turns at up to 67? angles. Standing 82-ft. tall and traveling 50 mph, this intense coaster crosses over itself an incredible 14 times while making frequent and tight directional changes. Evel Knievel will boast two 24-passenger trains of GCI's own Millennium Flyer cars specially designed to maneuver the ride's sharp turns and high banks on a dime while providing an exceptionally smooth ride.

sorry to stray off topic, just ignore this post Thanks!

[GADVwow]

^^

That's not off topic...it's of great interest, and indicative that the company is in the business for the long haul...

[darkridedan]

Oh it sounds awesome but my money tree won't bare fruit again until 2012. 

[Millennium Force 44]

Evel is 100 feet longer than J2.  Yes short, but the ride description sounds awesome ...

A daredevil's dream, the 2,700-ft. ride experience begins with an 80-ft. first drop at a 90? left turn angle, which is answered with a 55-ft. double down drop. Sixteen hills follow with camelbacks, a 40-ft. fan curve and multiple high-banked turns at up to 67? angles. Standing 82-ft. tall and traveling 50 mph, this intense coaster crosses over itself an incredible 14 times while making frequent and tight directional changes. Evel Knievel will boast two 24-passenger trains of GCI's own Millennium Flyer cars specially designed to maneuver the ride's sharp turns and high banks on a dime while providing an exceptionally smooth ride.

sorry to stray off topic, just ignore this post Thanks!

Off topic again, but is the 90 degree left turn angle describing that the first drop will turn 90 degrees to the left, or is it saying that there will be a left turn after the first drop banked at 90 degrees?

[rjholla2003]

The former of your two scenarios.

Wade, i agree about the Omni-Movers.  Throw a Buzz Lightyear like attraction in the park and it'll be a hit.  Throw in something like Escape from Pompeii the next year and you'll have many happy visitors.