Six Flags’ controversial new CEO — who drew fireplace this month for disparaging the corporate’s theme parks as “low-cost day care facilities for youngsters” — simply bought a significant vote of confidence from the corporate’s largest shareholder.
H Companions Administration — a New York-based hedge fund that could be a longtime Six Flags investor — scooped up half 1,000,000 shares within the large theme park chain, rising its stake to 12.5% as of Tuesday, based on securities filings.
The fund’s choice to double down is a transfer that consultants say is probably going a present of assist for the corporate’s CEO Selim Bassoul — regardless of a depressing earnings report earlier this month that despatched Six Flags shares tumbling 18% in a single day.
The Arlington, Texas-based firm disclosed Aug. 11 that it misplaced practically 2 million prospects this yr because it raised costs. To make issues worse, Bassoul instructed analysts on a convention name that the chain was seeking to improve its clientele from “Walmart and Kmart” customers to Goal customers — feedback that sparked buyer outrage on social media.
Bassoul additionally riled prospects after he stated the corporate is attempting to maneuver away from being “low-cost day care facilities” for “rowdy” youngsters.
However H Companions, which as soon as held a 30% stake in Six Flags, has a protracted historical past with the corporate, shepherding it by its 2009 chapter.
“They performed an enormous position serving to the corporate to emerge from chapter in 2010,” Rosenblatt Securities analyst Barton Crockett instructed The Publish. “They're clearly on board with the long run technique and prepared to look previous what has been a rocky begin for the brand new CEO.”
The shares have been up 4.2% at $25.44 on Wednesday.
“Lots of people have been simply flabbergasted about how rocky the second quarter was,” added Crockett, who has since slashed his worth goal on the shares by 50% to $28. “However this concept of charging extra, lowering the crowds and bettering the [customer] expertise is frankly a web page out of the Disney playbook.”
Bassoul was named CEO in November after serving on the corporate’s board since 2020 alongside representatives of the hedge fund.
“He’s somebody the board is aware of properly and [it] clearly is aware of his persona,” Crockett added.
H Companions didn't reply to a request for remark.
Wall Road analysts slashed their scores and estimates after the depressing quarterly report, with one analyst describing Six Flags outcomes as “indefensible.”
Many Six Flags insiders and park goers likewise stated they’ve seen sufficient of Bassoul and need him canned.
“We cancelled our diamond elite passes at this time, primarily based on how he views company,” a Reddit consumer wrote after the earnings name. “We gained’t burden his firm with [our] working class cash anymore.”
Insiders began a Reddit thread entitled “Step down Selim.”
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