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Six Flags Stock Downgraded

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https://www.cnbc.com/2020/01/10/things-are-so-bad-for-six-flags-it-got-downgraded-twice-by-the-same-analyst-in-less-than-12-hours.html

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The company also said it saw weaker-than-expected sales of season passes in memberships in the U.S., and would report a total revenue dip of $8 million to $10 million for the fourth quarter.

Hopefully this is just a trend at Six Flags and not an indication of how things are going at Cedar Fair.  Definitely glad that Six Flags did not go through with the reported purchase/merger of Cedar Fair.

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20 minutes ago, Ben43065 said:

Fun fact Cedar Fair now has a higher market cap then Six Flags.

I like that, FUN fact! :lol:

@CoastersRZ don't forget this in that article as well. And I think every CF pass holder should be happy that deal did not go through.

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That declining performance in the U.S. has more to do with Six Flags than theme park industry as a whole, according to Wells Fargo.

 

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I think a lot of it also has to do with the new attractions that they are adding at the Six Flags parks.  I mean, yes, West Coast Racers looks good.  But when was the last time that Six Flags St. Louis got a sizeable new investment?  

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I think this could just be a blip in the radar for SIX.  Remember when Q3 numbers were released for Cedar Fair back in 2018 and many thought it foretold the end of Kings Island and Cedar Fair as we know it (after all, KI failed miserably LOL).  Cedar Fair reacted nimbly and the company ended up having a great Q4 and a great 2019.  Hopefully SIX will be nimble as well.  If not....I'd like to see some parks added into the fold, specifically in year round markets.  ;)

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I'm kind of surprised to see weaker pass sales with how cheap they are. I paid around $150 for my 2020 Gold Pass with Premium Dining. It's almost ridiculous that $150 gets you into all Six Flags parks with free parking, 2 meals and a snack every visit and a souvenir bottle with free refills all season, multiple bring a friend free tickets (including a free friend ticket just for buying the pass) and other smaller perks. That's the Great Adventure price, other Six Flags parks charge even less than that.

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6 hours ago, CoastersRZ said:

I think a lot of it also has to do with the new attractions that they are adding at the Six Flags parks.  I mean, yes, West Coast Racers looks good.  But when was the last time that Six Flags St. Louis got a sizeable new investment?  

Justice League was $15M in 2015, but yeah coasterwise 2013 was a used 24 year old boomerang that doesn't count. 

I have no idea about HitP attendance recently, but if that is softening despite running a decent selection of coasters that would not be a good trend for the industry. 

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Much of the stock price adjustment seems triggered by the default of Six Flags' partner in China, leaving those projects in doubt.

The drop in domestic pass & membership revenue is surprising. The gold level monthly membership is cheap enough ($6-$9/month depending on park) that many just don't bother to cancel, regardless of how often they visit. Evidently the Planet Fitness model has its limits. Unlike Cedar Fair, they don't have much additional room to discount to drive sales.

As a park guest, I'd love to see Six Flags take a more Cedar Fair-esque approach of investing in the guest experience while gradually increasing the pass/membership cost. While every SIX park gets a new attraction every year (unless you're SFMM in 2020), investments in areas like food and general park improvements have been lagging behind FUN for several seasons.

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21 hours ago, malem said:

 

As a park guest, I'd love to see Six Flags take a more Cedar Fair-esque approach of investing in the guest experience while gradually increasing the pass/membership cost. While every SIX park gets a new attraction every year (unless you're SFMM in 2020), investments in areas like food and general park improvements have been lagging behind FUN for several seasons.

I'm pretty sure all of that will come across as a foreign language to SIX management. 

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Those results by Six Flags are incredibly atrocious, and amongst the worst earnings misses I have seen so far this year. Cedar Fair, even discounting the Schlitterbahn parks from the equation, still had 5% yoy attendance growth. I can attest personally to Kings Island being and feeling busier in 2019 than 2018, especially during the Gran Carnivale and Halloween Haunt. For Kings Island to be doing great even if it is a mature park as Zimmerman described in the earnings call speaks to the Cedar Fair model. Cedar Fair has room to relax now after 2018 being slightly challenging. I feel that they are focusing more on the bottom line than boosting the share price, which while may not cause the stock to skyrocket, leads to better long term results. Six Flags suddenly went from being HIGHLY successful in 2018 compared to Cedar Fair (at one point being priced at 70$ a share to Cedar Fair's 50 in mid-2018) to completely struggling out of nowhere. Many analysts and investors were incredibly surprised, which does not happen to the magnitude of Q4 SIX earnings often. They were expecting EPS of 30 cents per share. It ended up being negative, HUGE miss. Something seems amiss, the CFO is retiring suddenly, the CEO left too.... this often happens before things hit the fan and it seems like things may be hitting the fan. I believe the rumored offer for FUN by SIX was a last ditch hedging and bluffing of their hand in order to expand, it seems oddly similar to Six Flags circa Y2K. But after that fell through, they realized they could not outrun the can any longer. 

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And yeesh, just found this on Yahoo finance...

Six Flags Deadline Alert: Faruqi & Faruqi, LLP Encourages Investors Who Suffered Losses Exceeding $50,000 In Six Flags Entertainment Corporation To Contact The Firm

https://finance.yahoo.com/news/six-flags-deadline-alert-faruqi-143200415.html

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The lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (1) Riverside, a Chinese real estate developer that would provide the capital investment for future developments in China, faced far more financial distress than disclosed to investors; (2) as a result, there was a high likelihood that Riverside would default on its payment obligations to the Company; (3) the Company's international strategy, which relied predominantly on its exclusive agreements with Riverside to develop Six Flags-branded parks in China to drive revenue growth, was significantly less promising than represented to investors; and (4) as a result of the foregoing, Defendants' statements about the Company's business, operations and prospects lacked a reasonable basis.

 

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