Six Flags investors threaten lawsuit after theme – Business News
Six Flags investors are threatening to sue the amusement park giant after it reported a beautiful $100 million quarterly loss — main some to query whether or not the company may have disclosed its financial troubles earlier.
Two Los Angeles-based law corporations have introduced that they’ve launched separate investigations into Six Flags Entertainment Corp. for attainable securities fraud.
The Schall Law Firm and Portnoy Law Firm mentioned they’re trying into whether or not Six Flags intentionally misled shareholders earlier than dropping devastating second-quarter outcomes on Aug. 6.
“As a matter of policy we do not comment on litigation,” a Six Flags spokesperson informed The Post.
Six Flags reported a staggering $100 million quarterly loss. Getty Images
Shares of the theme-park operator, traded beneath the ticker FUN, have been in a tailspin because the Aug. 6 earnings release, when Six Flags disclosed it had gone from revenue to deep crimson ink in simply a yr.
Six Flags stock price has fallen more than 45% year-to-date. In 2017, the share price reached an all-time high of more than $70 — however has since plummeted by more than 60%.
As of Monday morning, the stock was down practically 2%. It was trading at round $25 per share.
The company additionally slashed its full-year forecast, rattling Wall Street and wiping hundreds of thousands off its market worth.
Investors are threatening to sue after receiving the dangerous information. Chris Chambers – stock.adobe.com
Executives blamed dangerous climate for holding thrill-seekers at home, but in addition admitted season-pass gross sales have been lagging badly — a troubling signal for a chain that will depend on repeat clients.
The meltdown comes as CEO Richard Zimmerman, who took the helm in late 2021 promising a turnaround, prepares to step down at yr’s finish. His looming exit has solely added to the sense of chaos across the once-iconic model.
“The investigation focuses on whether the company issued false and/or misleading statements and/or failed to disclose information pertinent to investors,” the Schall firm mentioned in its discover.
The Los Angeles-based law store, which focuses on shareholder litigation, is now urging anybody who purchased Six Flags stock and suffered losses to get in contact.
Lead legal professional Brian Schall is offering free consultations and dangling the chance of a class-action lawsuit.
The Schall Law Firm and Portnoy Law Firm is investigating whether or not investors have been intentionally misled. AFP through Getty Images
Analysts had anticipated headwinds from inflation and better rates of interest, however few predicted a nine-figure loss tied to empty curler coasters and soggy summer time weekends.
For investors, the image is even uglier given Six Flags’ previous guarantees of secure growth and powerful shopper demand. The firm’s troubles additionally raise questions on its strategy of mountaineering ticket costs whereas attempting to rebrand the parks as more upscale locations.
The Schall investigation is one of a number of probes prone to emerge as attorneys scent blood. Securities corporations routinely pounce when a big-name stock tanks, hoping to construct class actions that may drive settlements or payouts.
The firm is also floating the chance of a class motion lawsuit. Thomas P. Costello / Asbury Park Press / USA TODAY NETWORK through Imagn Images
In its pitch, Schall factors out that Six Flags not solely reported poor outcomes but in addition cut its steerage for the remainder of 2025 — an admission, critics say, that management noticed storm clouds forming long earlier than they informed shareholders.
The announcement has set off contemporary chatter amongst Wall Street skeptics that the company might have tried to cover how fast its attendance and go gross sales have been deteriorating.
Adding to the drama, Zimmerman’s deliberate exit leaves the company with out a clear chief during its most precarious stretch in years. He will step apart simply because the essential vacation season looms, with investors now bracing for more volatility.
Schall’s crew is pushing anybody who misplaced money on Six Flags stock to signal up, promising to “discuss your rights free of charge.”
