Investor Alert: Kaplan Fox Announces Investigation Of Six Flags Entertainment

NEW YORK, March 19, 2020 /PRNewswire/ -- Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) is investigating claims on behalf of investors of Six Flags Entertainment ("Six Flags or the "Company") (NYSE: SIX).  A complaint has been filed against the Company on behalf of investors that purchased Six Flags common stock between April 25, 2018 and January 9, 2020, inclusive (the "Class Period").

According to the action, Six Flags is the largest regional theme park operator in the world, with 26 parks across North America. 

Prior to the start of the Class Period, in late June 2014, Six Flags announced the signing of an agreement to build multiple Six Flags-branded theme parks in China with real estate developer Riverside Investment Group Co. Ltd. ("Riverside").  The Complaint alleges, among other things, that throughout the Class Period, Defendants made materially false and misleading statements and/or failed to disclose that Six Flags' licensing agreements with Riverside would not result in the benefits that Defendants had publicly represented.

According to the complaint, the truth began to emerge on February 14, 2019, when the Company surprised investors by announcing a negative revenue adjustment of $15 million in the fourth quarter of 2018 related to the Company's agreements with Riverside due to delays in the expected opening dates of some of the parks in China, which the Company blamed on macroeconomic issues in China.  As a result, Six Flags reported a 38% decline in the Company's sponsorship, international agreements and accommodations revenue compared to the fourth quarter of 2017. Six Flags also told investors that it expected weaker-than-anticipated quarterly revenue from its agreements with Riverside in 2019 and 2020. 

Following these disclosures, the Company's stock price fell $9.00 per share, or 14.09%, to close at $54.87 per share on February 14, 2019.

According to the complaint, on October 23, 2019, among other things Six Flags postponed the timing of its park openings in China, stating that "there's a very high likelihood going forward that we will see changes in the timing of park openings" and "it's unrealistic to think it's going to be exactly as we've outlined." 

Following these disclosures, Six Flags' stock price fell $6.35 per share, or 12.4%, to close at $44.88 per share on October 23, 2019.

According to the complaint, on January 10, 2020, before the market opened, the Company revealed that the future of its China projects was in jeopardy.  In particular, the Company announced that the development of the Six Flags-branded parks in China continued to encounter challenges and had not progressed as expected.  The Company also reported that Riverside continued to face significant challenges due to the macroeconomic environment and declining real estate market in China, which caused Riverside to default on its payment obligations to Six Flags.  Furthermore, the Company told investors that, in the fourth quarter of 2019, it would realize no revenue from its agreements with Riverside and expected a negative $1 million revenue adjustment related to those agreements. The Company also announced one-time charges totaling approximately $10 million related to Riverside's default.

Following these disclosures, Six Flags' stock price fell $7.80 per share, or 17.82%, to close $35.96 per share on January 10, 2020.

If you are a member of the proposed Class, you may move the court no later than April 13, 2020 to serve as a lead plaintiff for the purported class.  You need not seek to become a lead plaintiff in order to share in any possible recovery.  If you would like to discuss the complaint or our investigation, please contact us by emailing pmayer@kaplanfox.com or by calling 800-290-1952.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

Kaplan Fox & Kilsheimer LLP, with offices in New York, San Francisco, Los Angeles, Chicago and New Jersey, has many years of experience in prosecuting investor class actions. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com.  If you have any questions about this Notice, your rights, or your interests, please contact:

Donald R. Hall
KAPLAN FOX & KILSHEIMER LLP
850 Third Avenue, 14th Floor
New York, New York 10022
(800) 290-1952
(212) 687-1980
Fax: (212) 687-7714
E-mail: dhall@kaplanfox.com

Laurence D. King
KAPLAN FOX & KILSHEIMER LLP
1999 Harrison Street, Suite 1560
Oakland, California 94612
(415) 772-4700
Fax:  (415) 772-4707
E-mail: lking@kaplanfox.com

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SOURCE Kaplan Fox & Kilsheimer LLP