SIX stock has been a target of short sellers for quite sometime and things don’t seem to be getting better.
Six Flags said in a January 10, 2020, SEC filing that its partner in China, real estate developer Riverside Investment Group, had defaulted on its payments to the company due to a declining market.
“The development of the Six Flags-branded parks in China has encountered continued challenges and has not progressed as expected… While the company continues to work with Riverside… the eventual outcome is unknown and could range from the continuation of one or more projects to the termination of all the Six Flags-branded projects in China.” Source: https://www.sec.gov/ix?doc=/Archives/edgar/data/701374/000070137420000003/six-20200110x8k.htm
Riverside Investment Group can’t make its payments to Six Flags in-part because of a declining market in China caused by the coronavirus. This is how the financial contagion caused by the sudden drop of consumer spending in China spreads to other countries even if the coronavirus does not.
The large players volume in SIX stock doesn’t look bad but it doesn’t look good either. The Twiggs Money Flow is clearly breaking to the downside.
On January 10, 2020, after the 8K filing from the SEC hit, Wells Fargo downgraded the stock twice in a single day. Source: https://www.cnbc.com/2020/01/10/things-are-so-bad-for-six-flags-it-got-downgraded-twice-by-the-same-analyst-in-less-than-12-hours.html
Six Flags shows us that even if a company is not doing direct business in China yet, any U.S. bank or corporation with outstanding loans or that is depending on payments from a Chinese company, could be in jeopardy of suffering default on those loans because of the coronavirus and the sudden plunge of both sell side and buy side demand in China.