CNBC’s Jim Cramer’s review on Monday six flags” and said the amusement park giant could ultimately improve its performance by working with activist investors.
“The new management at Six Flags, with the help of Jana Partners and Travis Kelsey, should be able to turn things around, but I’m not going to get into this unless I’m willing to be very patient because it’s going to take time,” he said. “And there is always the possibility that the company itself may become inoperable if the weather is bad or there are continued operational issues at the park.”
Last month, activist investor Jana announced that he had partnered with Kansas City Chiefs football player Travis Kelce and several others to acquire a roughly 9% stake in Six Flags.
Kramer suggested that Six Flags faces not only company-specific issues but also macroeconomic headwinds, which are contributing to disappointing earnings.
He said businesses were being hurt by a sharp drop in consumer spending, especially among low-income groups. Severe weather conditions early in the season, including severe thunderstorms and a heat wave, also hampered visitors, forcing the company to close the park for several days, Kramer continued.
One of the company’s new rides, which was supposed to get a lot of attention, broke down several times over the summer, one of which left a passenger stranded, Kramer noted. He also noted that Six Flags has delayed the opening of new rides at several locations, including parks in New Jersey and Massachusetts. Kramer said Six Flags’ merger with peer Cedar Point hasn’t necessarily been positive for the overall business, arguing that more than a year after the merger, there hasn’t been any meaningful improvement in attendance. Lower attendance will reduce sales of food, beverages and other additional products, he said.
Kramer emphasized that rebuilding will not be easy. He said the company needs to clean up its balance sheet, possibly close unprofitable parks and work with Yana. But he said Jana’s support for Six Flags’ recent CEO change is a good sign.
“Jana has a great track record. Maybe Kelce can unite Taylor Swift’s legions of fans in addition to Chiefs fans,” he said. “I’m a little more optimistic about Six Flags considering they like their new CEO, especially since gas prices are way down.”
Six Flags declined to comment.
