INTRODUCTION
Jaffer commenced his carrier as an analyst at the investment bank Donaldson. Companies are offering junk bonds to increase its finance throughout the year 1990s.
In 2001, Jaffer met with hedge fund manager working in the Incipient York office of Daniel Loeb. Loeb was the analyst and chief investment officer. After joining the Third Point in 2001, Jaffer availed cull investments to fund earlier in his vocation. Over the next couple of years, Jaffer avail fund makes remuneration profitable investments in companies including Dade-Behring, Magellan, Warnaco and Leap Wireless.
Between 2005 and 2010, H Partners engendered annual net income comprised 24%. During this time, Jaffer’s fund assets grew under-take management employees, wealthy families and donations. In addition, it expanded the team of 10 employees.
Six Flags were founded by Angus Wynne in 1961. The first six flags was located in Texas; now it has 19 parks across the Cumulated States, Mexico and Canada. Six Flags denomination was taken from its first property where the six countries' flags flew over Texas for the state's history. The first six flags were called Six Flags over Texas. Six Flags has become the park of the world's most substantial huge sites, predicated on the amount of properties. Six Flags offers guests a prosperous affordable experience to enjoy with friends and family.
Six Flags has many things to offer to its incipient and old thrill seekers. "Our parks 19 themes, de-hydrogen monoxide and zoos in North America are better than ever, offering families today and teenagers perfect one-stop destination for expanded regalement, industry bellwether thrill rides to di-hydrogen monoxide magnetization, thematic areas, areas, parades, concerts and children's shows, restaurants, games and outgoing goods. Six Flags offers an experience like no other, there are so many different things that guests get to do and optically distinguish during the visit. "The licensing accordance with DC Comics and Ad-monitor Bros. Consumer Products sanctions privileges Six Flags theme parks to many great cartoon characters in the world and super heroes, Bugs Bunny and his Looney Tunes friends DC Comics Super Heroes Batman, Robin, Green Lantern, Wonder Woman and The Flash, sanctioning Six Flags to offer 24 million customers a range of characters, including characters meet and greets, repasts, photo and autograph opportunities and incipient options for retail ".
After more than 40 years of being in business for Six Flags,ithad to commence closing and sale of many of its locations. Six Flags had a growing debt that had to be addressed. In the coming years it faced natural disasters, the economic crisis and the incipient management, leading to lower attendance rates and cash flow quandaries. Decrease in cash flow of the company for more than $ 120 million annually, its stock value had fallen below the minimum required, it could not pay its preferred shareholders and delisted at the Incipient York Stock Exchange in April 2009. In June 2009 bankruptcy were presented. The restructuring plan was approved by companies that were able to exit bankruptcy protection on May 3, 2010. In August 2010 it was broadcasted in April 2010 that Jim Reid-Anderson as the incipient Chairman, President and CEO Six Flags. After their struggles in recent years they are hoping they can get back on track and continue to provide the experience to their guests, as pristinely intended to do since 1961.
H Partners and Six Flags Case Solution
Question # 1
What were the causes of the financial distress six flags encountered that led to the company’s filing for bankruptcy protection in 2009? And why was H partner’s confident about six flags turnaround then?
Due to the volatile condition of Six Flags between 2003 and 2009, one can conclude that the business model of Six Flag was not financially sound. By visually examining the commensurable companies, like Disney or Macrocosmic Studios theme parks; they are not the only component of its business model. Besides being much diversified, Six Flags’ tickets at deep discounts and broadlybulky promotions that boosted the average ticket price to $ 21.10 in 2008. Unlike its competitors sell, parks are marketed to consumers within 100 miles from the park. Companies like Disney and Macrocosmic have national and international tourists, most of whom originate from more than 100 miles away. This leaves Six Flags with its increased limited park due to the constrained the population within driving distance of the park. Moreover, an infelicitous sequence of events hit the company in 2009. The outbreak of H1N1 (swine flu) caused the city park of Mexico to close and adversely affected two Texas parks. Public opinion was negatively affected by the news of bankruptcy and weather deterred park-goers. Conclusively, Six Flags is a luxury that some people could not pay throughout the financial crisis and the recession that hit the economy during this time. The financial crisis has shown that the business model Six Flags' was not recession proof. Although scarcely managing to stay afloat in an economy that works well with its unique core business, it became in feasible to do so when consumers were not spending supplemental luxuries like a regalement park................
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