Friday, January 23, 2009

Cedar Fair's Inevitable Decision

Cedar Fair just released a statement saying they will be paying the dividend as usual for the 4th quarter of 2008. But then they slapped this in there:

"In light of the weak economy and uncertain credit environment, we are considering alternatives to reduce the Company’s debt levels and better position the Company for future growth. One such alternative includes reconsidering the Company’s distribution policy based on its overall long-term capital structure objectives. We will complete this evaluation in the near future and will not make any decisions on the level of future distributions until that review is completed and reviewed by the board.”

What this means is you can bet on them cutting the distribution severely in order to manage their debt in order to survive. That Paramount purchase really did them in, though I doubt anyone in the company would admit it. Watch for the stock price to dip even further on this news.