The folks at Facebook may be watching today's SeaWorld IPO news and wishing that is how the Facebook IPO went. Last night, SeaWorld IPO shares were priced at $27 per share, which was at the top end of the expected range. Fast-forward to this morning and the news just gets better. Shares of SeaWorld (SEAS) are selling at more than $32, an increase of over 18 percent from the IPO price.
SeaWorld has had a rocky few years but private equity firm Blackstone stepped in to help in 2009 when it paid $2.3 billion for the theme park company. Under Blackstone management, the company has grown and now includes 11 theme parks, an iPhone app and plans for future expansion.
“SeaWorld’s business model is vulnerable to a weak economy and to consumers who remain frugal in the wake of the recession. The company gets most of its money from admissions at its theme parks, and relies on sales of food and merchandise. Its average ticket price is higher than those of two main rivals, Six Flags and Cedar Fair, according to a research note from Ian Corydon, an analyst with B. Riley & Co. Still, SeaWorld is trying to attract a broad swath of visitors.” Source: NY Times
A trip to SeaWorld San Diego would cost my family of four $304 for tickets alone. By the time you add in food, gas and a hotel stay, the vacation would near the $1,000 price point. When consumers are cutting back during tough times, vacations and other luxury items are the first things that go and so I was a little surprised to see how strongly the stock is performing today.
Perhaps investors are drawn in by the changes that the Blackstone Group made or perhaps the decision to immediately offer stockholders a dividend of $0.20 per share is what is driving the stock prices higher. I know that I’m a fan of stocks that pay dividends and I’m not even a savvy investment professional.
via [NY Times]