Got the fast pass to puts on El-Toro! (Six Flags -$SIX)

Wanted to get something up on this before tomorrows open since I’ve been seeing more about it on the news, but Sox Flags ($SIX)is in hot water.

First let’s start with the Financials

The company reported $0.53 earnings per share for the quarter, missing the consensus estimate of $1.01 by ($0.48). The company had revenue of $435.40 million for the quarter, compared to the consensus estimate of $518.50 million. Six Flags Entertainment had a net margin of 8.83% and a negative return on equity of 14.53%. Six Flags Entertainment’s quarterly revenue was down 5.3% compared to the same quarter last year. During the same quarter in the previous year, the company posted $0.81 EPS.

The quarter also a $5M reduction in sponsorship, international agreements and accommodations revenue.

Attendance fell 22% in the second quarter from a year ago, even as other theme-park operators have seen visits nearly return to prepandemic levels.The decrease in attendance was partially offset by guest spending per capita increasing 23% to $63.87. Admissions spending per capita was up 27% to $36.35 and in-park spending per capita rose 18% to $27.52.

CEO and President Selim Bassoul, who was appointed in November after serving on the Texas-based company’s board, attributed the decline to the elimination of ticket discounts and other programs such as the parks’ unlimited meal plan. In doing that, the company is attempting to lower the number of people in its parks and change its main customer base.
“We had discounted too much and the philosophy of filling our parks was not the right strategy. At the end, all we’re doing, people did not have a good experience,” Bassoul said on an earnings call Thursday. “So we only got the discounter or we became a daycare center for teenagers. It was a cheap daycare center for teenagers during breaks and the summers.”

These earnings also followed a shooting at six flags great America in Illinois where 3 people were injured.

Now there is a new incident where 13 people were injured on their famed “El Toro” wooden rollercoaster. Employees have been reporting to the media that Six Flags has known about these issues and has not bothered to try to fix them.

I personally have thought for awhile that Six Flags doesn’t have the mojo anymore, no real incentives for kids to want to go, and will never see the crowds that they saw 5-10 years ago. With the incidents in the news, pandemic and all the fear based news of sickness etc, Inflation, the economy, and places like Disneyland making big incentives for people to want to go there vs a place with lame and/or Dangerous rides, I can see Six Flags becoming a place in history.

My position 10 @ 10/21 $20p

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Cut my puts the other day for 5%. Bought more AJRD 9/16 45 calls around 10am ET.

I do plan to buy puts again on SIX.

With the fed hike and everything continuing to drop, this thing may very well see sub $20 if it continues to follow the market if it drops more this week/month.

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So this play would’ve ended up being a 3x’r if I decided to stay in it and not try to fuck with other plays.

Anyway. $SIX earnings are November 10th (Thursday) premarket. Analysts aren’t expecting it to do well.

Six flags Is expected to post quarterly earnings of $1.73 per share in its upcoming report, which represents a year-over-year change of -3.9%.

Revenues are expected to be $572.88 million, down 10.3% from the year-ago quarter.

Just about every analyst has cut their PT for Six Flags with Truist being the lowest PT of $18

Citigroup gave a PT’s at $20. Jeffries just cut their PT from $32, to $24, Oppenheimer $27 from 29, B Riely securities 23 from 24.

Six flags long term debt has also climbed immensely from $800 million, to $2.3 billion.

Six flags theme parks have also been talking about reducing operating hours, starting with their Magic Mountain theme park now being closed Tuesday’s, Wednesdays, and Thursday’s.

There is a $5 million dollar lawsuit by employees for unpaid wages for time spent for mandatory pre and post shift security screenings.

With how the economy is going, showing consumer spending being lower, absolutely no news or catalysts showing any kind of improvement since Q2’s bad earnings, lawsuits, and debt going through the roof, I don’t see how there can be really any good news for six flags coming unless someone buys them out.

I personally don’t think six flags is going to be a place in 10 years. They got nothin compared to Disneylands, Universal studios, seaworlds, etc. I think they’ve run their course. It’s over man.

My position - 11@ 11/18 $20p

So….I know this play did not go at all as I would’ve hoped this last week, but I think as we saw with CPI taking everything upward with it, I think this still has a chance to drill if the market loses momentum. Might not be next week or the week after (I have no clue obviously) but when the market loses steam, this I’m guessing will be seeing lower lows.

Six Flags (SIX) came out with quarterly earnings of $1.39 per share, missing the estimate of $1.65 per share. This compares to earnings of $1.80 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -15.76%.

Six Flags’ net income for the quarter dropped 26% year-over-year, to $116 million, with Adjusted EBITDA [earnings before interest, taxes, depreciation, and amortization] dropping 19%, to $226 million.

Theme park attendance fell 33% in the three months ending October 2 at Six Flags versus the same period one year earlier, the company reported today. The attendance drop contributed to a 21% decline in revenue for the quarter, from $638 million in 2021 to $505 million in 2022.

Guest spending did rise 17% to an average of $60.96 per visitor, driven by a 22% increase in spending on admission, as Six Flags raised gate prices and saw a higher percentage of visitors using single-day tickets. (Looking at it another way, visits by passholders basically tanked.)

Six flags did announce H partners investments increased their ownership via common stock from 14.9% to 19.9%.

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