Investors in Six Flags Inc. have discovered that two entrepreneurs have plans for turning around the amusement park company, whose stock price has plunged as fast as its roller coasters.
Daniel Snyder, the principal owner of the Washington Redskins, and Bill Gates, the founder and chairman of Microsoft Corp., have bought up big chunks of the 40-year-old purveyor of water parks, drive-through safaris and corndogs.
Superman: Ride of Steel is one of the roller coasters at Six Flags America in Largo. Debt has kept the amusement park firm from opening many new rides.
(Six Flags America)
VIDEO: The Washington Post's Michael Barbaro discusses this article.
Metro Business: Coverage of Washington area businesses and the local economy.
In a filing yesterday with the Securities and Exchange Commission, Gates said he may seek a spot on the company's board. Snyder made a similar filing Monday. In the documents, both men sharply criticized Six Flags' management.
Gates, who started buying shares in 2002, owns 11.5 percent of the company, or about $54 million worth of stock. Snyder, who started buying the stock in August, holds 8.76 percent, or about $41 million in stock.
Their stock purchases come as Six Flags, which operates 31 theme parks, including one in Largo, struggles with falling attendance and revenue. The company posted a loss of $61.7 million in 2003. In July, it reported a 4.1 percent drop in attendance from a year ago. The company has warned it will miss full-year 2004 sales projections. Its share price has dropped from $8.29 in March to as low as $3.49 on Aug. 10.
The theme-park industry is in a downturn. Attendance fell from 324 million in 2002 to 322 million in 2003, according to the International Association of Amusement Parks and Attractions, which blamed a cold, wet summer. But Six Flags' performance has lagged some of its competitors, according to analysts.
Gates's Cascade Investment LLC said in SEC filings that it is "increasingly dissatisfied" with Six Flags' financial performance. Snyder's Red Zone LLC faulted it for being "continuously outperformed by its peers."
Debbie Nauser, a spokesman for Six Flags, declined to comment.
Gates and Snyder declined to comment on their investment tactics. But two people familiar with their plans said there is no coordination.
"There are similar frustrations but that's it," said an executive at Cascade Investments who has been briefed on Gates's investment strategy but was not authorized to speak publicly on the matter.