Apparently I’m not the only one disenchanted with Six Flags (SIX).
Daniel Snyder’s Red Zone, which until recently owned 11% of the troubled theme park operator announced in an SEC filing that it is distributing 100% of its shares to investors so they may do with them as they wish. Translation? Investors have grown tired of watching the $49 million dollar investment dwindle to $35 million with no hopes of it turning around anytime soon want to cash out.
Shares, currently sitting at $3.22 are over 50% off their 52 week high levels set in early June. Six flags has blamed the weather, rising expenses and just about everything else except the Iraq War for it misfortunes when the reality of the situation is that when compared to the other them parks around the nation, Sic flags is by far the worst value proposition for a family. That being said, this is the reason attendance has been static at three year low levels this summer despite managements efforts to cram more rides into static spaces.
I said it in August and was reviled by Six Flags fans and I can only guess shareholders that shares are dead money with no chance of a rebound anytime in the near future. When the largest shareholders closest to the operations start cashing out for losses, I can only surmise they feel the same way. I guess you could even take it a step further and figure they actually feel they is more downside risk that anything else and I think they would be right.
9 replies on “Large Six Flags (SIX) Investors Jumping Ship.”
Hi Todd: I have to agree with your assesment of this problematic company. It showed up in my IBD Bottom 200 Composite stocks scan, as having low earnings, growth, and generally poor fundamentals, and a look at the 52 wk chart tells you SIX is sick as well. I like the Jan 2.5 puts, of which I have a few. Thanks for the info on the big shareholder splitting, that should only add fuel to this fire.
Thank you Todd, for yet another uneducated, unresearched, and misleading blog.
“When the largest shareholders closest to the operations start cashing out for losses, I can only surmise they feel the same way. I guess you could even take it a step further and figure they actually feel they is more downside risk that anything else and I think they would be right.”
Please provide the documentation that shows that ANY “largest” shareholder has cashed out. Half of the Red Zone shares went to Snyder who has explicitly stated he is not selling (and probably can’t until after the Earnings announcement). Secondly, the second largest shareholders has stated the same and is also on the SIX Board of Directors and likely can’t sell either. So, the remaining investors likely hold less than 3 million shares, I wouldn’t exactly call them the “Largest shareolders closest to the operations”.
Please stop writing blogs about things that are over your head, and that you clearly do not have the intellectual capacity to understand. It’s hard to believe, but SIX is clearly outside your circle of competency and not only should YOU not invest in this stock, but you should stop providing completely false information to people that don’t understand how incomplete and slanted your research is.
justin,
infantile insults aside, shapiro, snyder’s handpicked boy runs six flags. red zone knows beyond a doubt what is happening at six flags. there is only one reason to distribute shares that are underwater, people want out. those folks owning those share would be some of the “largest shareholders”. snyder also did not say he wasn’t going to sell, just that he did not “have plans to at this time. ” that means he can change his mind tomorrow
had he said he was going to sell, the stock would have collapsed leaving them additional losses before they could get out…he will be out soon enough
don’t be pissed at me because you bought stock in a company that will most likely be chapter 11 this time next year
nice try though…. you can play semantics all you want but this ship is sinking fast..
Todd,
Once again, do some research.
Those folks owning those shares would NOT be some of the “largest shareholders.”
First, Snyder owns about 50% of Red Zone. He now owns over 5% of Six Flags stock. That means that the remaining 5% is divided among all other investors within Red Zone LLC. Hardly making any one of them one of the “largest shareholders.” The largest shareholders, would be Bill Gates investment arm, Cascade Investments (10%), Tracer Capital (8.4%), Dimensional Fund Advisors (8.4%), HBK Investments (6.6%)… to name but a few.
Secondly, I’m sure now you’ll state that your comment was not about the largest shareholders, but the largest shareholders with inside knoweldge. Well… Snyder can’t sell tomorrow! Another absurd, ignorant statement. Snyder is the Chairman of Six Flags! Not only can Snyder not sell, but it is unlikely that any Red Zone investors can sell as they would have insider knowledge about the upcoming Earnings Annoucement.
By the way, last time Snyder did something like this (2005), (when he stated he was promptly divesting all his shares of SIX which at the time was about 8% I believe), he proceeded to purchase a huge number of shares and made an offer to purchase up to 35% of Six Flags at $6.50 a share. At that time, the stock of Six Flags was around $4.00.
You have yet to make any ‘objective’ argument as to why Six Flags is a bad company. You have written a subjective review, and now it appears that you are basing your investment ideas off of what other investors are doing… well, actually you’re basing it off of what you perceive other investors to be doing, which isn’t even what they are doing, lol.
Don’t be surprised when SIX posts a blow out 3rd quarter, you find out that Snyder increased his stake in Six Flags, and that Kentucky Kingdom was sold back to the previous owner before SIX purchased it in the 1990’s.
My problem with your articles isn’t your point of view, it’s the fact that there is absolutely no research behind your opinion, and any facts you do use are completely distorted to reflect the opinion you want to give because you had a bad time at a Six Flags park. Every investment decision that has dropped the stock in value from $6 to $3 has been based upon 2nd quarter results that do not even represent 1 month of peak Six Flags operating season.
Yikes,
Ok, let’s face it, SIX is in a world of hurt- I beleieve strongly (due to the fact that I know several companies that currently do business with SIX) that they have had a SUB-PAR year to date. Blame weather or whatever…how about bad management, really poor marketing (from the marketing gurus at ESPN) and bad execution (think Six Flags Over Georgia blowing their 40th anniversary with really bad press during a free give-away, and then their employees assaulting a kid outside the main gates in June).
3rd quarter will be DISMAL-so bad that SIX are offering 55-year and older staff buyouts this week-many have taken the offers, but will find out tomorrow (FRIDAY) who gets them. Apparently, so many upper-tier staff have accepted that they can’t afford to give all of them the buy-out. This will soften a bad financial year by making investors think that the buyouts are a cure and that they should accept the current pain for longer term benefits. Couple this with a lack of development of the ‘next generation’ of SIX leadership (A LOT of good folks left to find better opportuntities) and you have a crisis of epic proportion-well OK, maybe just a bad situation brewing….
Also, remember how RED ZONE said the previous guys were wrong to pander to the teen market and that families are the way to go….well, they announced a few weeks ago that they were ’rounding out’ the offerings by going with the ‘largest capital program’ in their history-mostly coasters for the teens. Short term bump for next year, then sell off and get out….it worked for the past 4 or 5 entities that owned them….
Let’s see how it goes in the next few weeks when the results come out.
I am actually looking forward to seeing if Shapiro can spin results like the last guy (Burke, the former SIX CEO) did, all the time increasing his own compensation…..
anon,
i agree.. it is a dog
justin,
he never actually made the offer to purchase 35%.. he said he “was planning to”
i find it ironic that you call me names for making “assumptions” yet go on to make them yourself about Q3 earnings, snyder’s purchases and asset sales. isn’t that a bit hypocritical?
Red zone WAS the largest shareholder (it had 11%), it no longer is.
answer this. why else would red zone divest those shares?
you have not made an argument for why the company is worth anything. debt? cash flow? earnings? i at least brought those into the mix.
you have brought nothing but insults…
i await your next round of name calling
Todd,
Please ignore this Justin idiot. I am continually amazed by the arrogance of stupid people. I hope he loses his money as a result, but I don’t want anyone else reading his bullcrap to be misled. As a former insider, I can verify what the previous “anonymous” poster wrote. Things are looking very bleak. If anyone clamors for “facts”, just look at Six Flags’ debt, attendance, expenses, etc.
anon,
you know i actually like it when folks disagree because i enjoy the debate. i just do not understand why they feel the need to just call names to disagree…
too bad