Six Flags Entertainment Corporation
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Northern District of Texas on behalf of those who acquired Six Flags Entertainment Corporation (“Six Flags” or the “Company”) (NYSE: SIX) securities during the period from April 25, 2018 through January 9, 2020. Investors have until April 13, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
The lawsuit alleges that the Company failed to disclose that Six Flags’ licensing agreements with Riverside Investment Group Co. Ltd. (“Riverside”), a Chinese real estate developer and Six Flags’ exclusive partner providing capital investment for developments in China, would not result in the “supercharge[d] revenue growth” and other benefits that Defendants had publicly represented.
On February 14, 2019, Six Flags announced 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. 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 announced that it expected weaker than anticipated quarterly revenue from its agreements with Riverside in 2019 and 2020. On this news, Six Flags’ share price fell $9.00, or 14.1%, to close at $54.87 per share on February 14, 2019.
On October 23, 2019, Six Flags again postponed the timing of its park openings in China and reported a 26% decline in sponsorship, international agreements and accomodations revenue for the third quarter of 2019 compared to third quarter 2018. On this news, Six Flags’ share price fell $6.35, or 12.4%, to close at $44.88 per share on October 23, 2019.
On January 10, 2020, 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 had defaulted 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. On this news, Six Flags’ share price fell $7.80, or 17.8%, to close at $35.96 per share on January 10, 2020.
If you acquired Six Flags securities, have information, or would like to learn more about these claims, please contact Thomas W. Elrod of Kirby McInerney LLP at 212-371-6600, by email at firstname.lastname@example.org, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.