The Economic Roller Coaster Ride of Six Flags (NYSE:SIX)

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By Jessica Schultz on July 23, 2014 Consumer Staples

On Monday, Six Flags (NYSE:SIX), one of the most popular amusement parks of the world, took a massive downfall in terms of its shares which had plummeted a significant 9%. The company stated that this was due to the lesser number of people that had been hosted by the amusement park in recent times. In the three months of April, May and June, 8.2 million people were entertained by the 18 parks owned by Six Flags (NYSE:SIX),, which brought the total to an 8% drop from what it was the same time last year in 2013.

According to the Six Flags team, the lessening of the masses is owed to the adverse conditions of the weather. Despite the fact that winter ended quite a while ago, it had left behind a cold spell that did not seem to subside very soon. This difficult weather had its impact on the schedules made by schools regarding regular classes as well as the spring break. This argument, however, is accepted by very few, and definitely not by Wall Street, who think this is not a good enough excuse. The argument also sounds less believable since Cedar Fair, another amusement park, has had a huge influx of customers in the same time span. The CEO of Cedar Fair, Matt Ouimet has expressed his sentiments a number of times at how his team was happy to host a huge crowd of enthusiastic people who were sick of being cooped up inside all winters and came rushing to the theme park. Even though Cedar Fair claims that there may have been a slight decrease in the people who came to the theme park, their revenue for 2014 up till now has been quite what they expected.

James Hardiman, a famous analyst who works at Longbow Research and studies the financial situation of Six Flags(NYSE:SIX), as well, has recently commented that Six Flags (NYSE:SIX), has not had a very favorable, ideal growth in the several preceding quarters and to get over these losses will not be a very easy task; it will require time, effort and a better strategy than the one previously used.

Six Flags (NYSE:SIX), had earnings that went higher than what was predicted, but the revenue of a total of $377 million seemed to disappoint Wall Street, who had estimated $396 million.

Six Flags (NYSE:SIX), has also revealed that every guest spends an average of $44 in the park, which is 11% more in this quarter than what it was previously. All of the guests now spend more on the tickets as well as the food items, which is proving to be a positive factor in terms of the economic situation. Shares priced at $38 whereas they were $40 in the summers.

In 2009, Six Flags (NYSE:SIX), went to bankruptcy court, following the Great Recession and headed out of it with a rise in stock by 50% in the years 2011 and 2012. However, much to the dilemma and alarm of the investors, Six Flags (NYSE:SIX) had a stock rise of only 20% last year and this year, as of now, even less than 5%. Hardiman, who has rated the company as a ‘hold’ says Six Flags (NYSE:SIX) did an appreciable job right after the bankruptcy episode, but still needs a lot of changes and brilliant strategies to recover completely.