A humorous look at the companies that caught our eye, for better or worse, this week
Six Flags Entertainment (DOG)
Think riding a roller-coaster is scary? It’s nothing compared to the scream-inducing ride that theme park operator Six Flags Entertainment gave investors this week. The shares suffered a high-speed vertical drop after the company swung to a fourth-quarter loss and slashed its dividend by 70 per cent, citing soft attendance at its domestic theme parks. With Six Flags also terminating a development agreement in China after its partner there defaulted on payments to the company, investors have had enough of this ride.
Northview Apartment REIT (STAR)
Hard: Trying to find a reasonably priced apartment. Easy: Making money on apartment real estate investment trusts. With rents shooting higher amid stratospheric housing prices and tight rental supply, apartment REITs have been surging as investors flock to the sector. Northview Apartment REIT’s units soared after private real estate companies Starlight Investments and KingSett Capital announced plans to buy Northview for $4.8-billion or $36.25 per unit – a 12-per-cent premium to the price before the deal was announced. That’ll pay a few months’ rent.
Groupon’s deals may save people money, but the stock just cost investors a pile of cash. With business stalling amid fierce competition, the online coupon company posted a 23-per-cent drop in fourth-quarter revenue, causing earnings to miss expectations and sending the stock to a steep loss. Groupon now plans to exit the physical goods business and focus on “local experiences” – which include dining, attractions, and health and beauty services – in a bid to return to long-term growth. Judging by the stock’s decline, however, investors aren’t buying it.
Blue Apron (DOG)
Blue Apron investors are blue, all right. Shares of the meal-kit delivery company – already down about 97 per cent from their 2017 initial public offering price – got clobbered after Blue Apron reported a fourth-quarter loss of US$21.9-million or US$1.66 a share as net revenue skidded 33 per cent. In light of the dreadful results, the company plans to close a production facility in Arlington, Tex., and is “evaluating a broad range of strategic alternatives to maximize shareholder value,” including a possible sale or a capital raise. But given the company’s trajectory, it’s hard to imagine anyone banging on Blue Apron’s door.
Fluor Corp. (DOG)
Fluor investors just got floored. Citing a U.S. Securities and Exchange Commission investigation into the company’s past accounting and financial reporting, the engineering and construction giant said it will delay filing its full-year financial statements until the end of February at the earliest. Fluor said it “has not made a determination at this time as to whether there are prior period material errors in its financial statements,” but plenty of investors have made a determination they won’t wait around to see how this ends.
Editor’s note: Starlight Investments and KingSett Capital have offered to buy Northview Apartment REIT for $36.25 per unit. An earlier version of this article included an incorrect price.