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Ardent Leisure share price drops

Troy81

By Troy81,
in Theme Park Discussion

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DaptoFunlandGuy Veteran

DaptoFunlandGuy

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There's nothing really sudden that seems to have happened, the volume on the inquest findings (the marked point is the trading day before the inquest findings were handed down) was up a lot on the week prior, and you can see that volume has continued.

Its possible some investors held onto their shares for a little while to see if the stocks would recover, and when they've continued to tumble, it has encouraged more to offload their shares. Nothing much else has hit the news since the findings, just echo stories and sub stories like the AWU banging their drum.

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westical Rising Star

westical

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Posted (edited)
On 06/03/2020 at 2:44 PM, AlexB said:

Its possible some investors held onto their shares for a little while to see if the stocks would recover, and when they've continued to tumble, it has encouraged more to offload their shares. Nothing much else has hit the news since the findings, just echo stories and sub stories like the AWU banging their drum.

There’s this small tourism and leisure killer called Coronavirus. 

Edited by westical
Can’t speel
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Richard

Richard

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The market on the whole has experienced huge losses in recent weeks so that's what we're seeing with Ardent to some extent.

Few examples however have been as dramatic as Ardent. They've slashed about two-thirds of their market cap in the past month and they're one of the 'biggest losers' on the ASX in 2020.

Inquest findings and growing coronavirus fears obviously play into it but inquest findings are not unforeseen and Ardent's share price losses outpace the rest of the market amid coronavirus uncertainty.

Remember too that investors at the time of the accident completely wrote off Dreamworld in share price losses. Ardent also wrote down its book value of Dreamworld to the point where the land is presumably worth more than the entity. Dreamworld's value to investors is strictly in terms of potential, not performance.

The half year results were not great. Main Event is floundering in a supposedly flourishing US economy. That business hit a wall several years ago and seems lifeless as ever of late. Dreamworld saw a 2.9% attendance growth off the back of Sky Voyager and a concerted effort at special events. That kind of negligible growth from historic lows following major investment and a more focused marketing strategy than we've seen in years is a big red flag and I wouldn't be so quick to say that the park is back on track because they've painted a few things and held some nice events.

It looks like there are wider confidence issues surrounding Ardent Leisure.

Three years ago a property developer and a corporate raider joined forces, bought up about 10% of Ardent and waged a public war to gain control of the Ardent board. Their pitch was that they knew how to fix Ardent with a three year plan to deliver $1 billion to investors. They got their board seats and now three years on about $700 million in market cap has disappeared. Their own investment in the company has lost them somewhere up near $70 million. On the plus side they've learnt a valuable lesson that just about anyone could have told them: you can't flip a theme park.

 

Anyway that's the short version of the article I would have written in recent weeks if I had the time/inclination. Just throw in a bit more sarcasm and some big words.

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MickeyD Experienced

MickeyD

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4 hours ago, joz said:

Gee I dunno at 52cents I reckon its worth a look.

 

Assuming they get through the next 2 years there's a lot of potential upside at that price. It's a pretty decent sized 'If' though.

If you have a spare $500 to put down, I reckon it would be worth it - surely your odds would be significantly higher than say a night out at the Casino?

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joz Experienced

joz

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2 hours ago, Skeeta said:

@jozbuying in at 52 cents would've been rushed in hindsight considering now they are 47 cents.

Who said anything about rushing. I said worth looking at. 47 cents its still worth looking at. Also I don't think I've ever bought anything that didn't go down in value the second after I bought it. Investing is a longer game than that though.

 

3 hours ago, MickeyD said:

surely your odds would be significantly higher than say a night out at the Casino?

I own shares in Star Casino because I think their project in Brisbane will do good, but bugger me I'd love if more people went to the casino because the Chinese aren't and those share prices not looking good lol 

 

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joz Experienced

joz

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The problem is that I don't have enough on the sidelines right now. Webjet is rapidly approaching bargain territory, BHP and Rio are dropping like a rock. QANTAS has more than halved. These are companies that 100% will survivor, and give it 3 years they'll be back to where they were. Ardent are looking like a good speculative bet, but there's so many other sure things out there right now, and we're not even at the bottom yet!

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