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Peak Resorts: The New ASC?

Tin

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Ahhh...The classic "back to the point". Even Bill O ' Reilly would be impressed with your mad rhetoric skillz.
 

VTKilarney

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This debate is a reflection of a difference in values. One side favors infrastructure that they can take advantage of. The other favors economic growth. Both sides are correct as far as their own preferences are concerned. The mistake the infrastructure camp is making is assuming that the hundreds of millions of dollars that were lost could not have been put to a more efficient use. Or, that the infrastructure itself could not have been created more efficiently. If you are a fan of efficient markets, Otten is not your poster boy. If you are a fan of getting it done no matter the cost, he is.

Frankly, Stenger has some characteristics of a mini-Otten.
 

VTKilarney

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One other thought. Was Stenger's expansion good overall for the northeast? Did it result in the closure of places like Tenney Mountain? Did it create an arms race that had a net overall negative impact? We're jobs really created, or just shifted?

I'm just thinking out loud.
 

Edd

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This debate is a reflection of a difference in values. One side favors infrastructure that they can take advantage of. The other favors economic growth. Both sides are correct as far as their own preferences are concerned. The mistake the infrastructure camp is making is assuming that the hundreds of millions of dollars that were lost could not have been put to a more efficient use. Or, that the infrastructure itself could not have been created more efficiently. If you are a fan of efficient markets, Otten is not your poster boy. If you are a fan of getting it done no matter the cost, he is.

Frankly, Stenger has some characteristics of a mini-Otten.

Good post.
 

BenedictGomez

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This debate is a reflection of a difference in values. One side favors infrastructure that they can take advantage of. The other favors economic growth. Both sides are correct as far as their own preferences are concerned. The mistake the infrastructure camp is making is assuming that the hundreds of millions of dollars that were lost could not have been put to a more efficient use. Or, that the infrastructure itself could not have been created more efficiently. If you are a fan of efficient markets, Otten is not your poster boy. If you are a fan of getting it done no matter the cost, he is.

Well stated.

One other thought. Was Stenger's expansion good overall for the northeast? Did it result in the closure of places like Tenney Mountain? Did it create an arms race that had a net overall negative impact? We're jobs really created, or just shifted?

My position on that is crystal clear. The artificial monkeying with economic markets, especially small generally closed markets like n.VT, is a very dangerous thing that almost invariably has negative unintended consequences. As for the jobs created metric hitting their mark (which is the entire intended point of this program BTW)? I dont even think the ardent Jay Peak fanboys really believe that any longer. Seasonal, migrational, "would you like fries with that" jobs dont count.

EDIT: Ehhh,,,,we already have much of this Stenger conversation in the JP/EB-5 thread though.....should try to keep this thread about Peaks and its' specific issues IMO.
 

Domeskier

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hundreds of jobs still around because of LBO. that's a fact you can't deny

Sorry the gamblers on Wall Street lost on that bet. My heart really bleeds for those poor investors who were so smart as to bet on skiing.

The money lost could have created many hundreds or even thousands of additional jobs if it had been properly managed. But yeah - who cares about the loss of those jobs when we can laugh about rich people losing some money.
 

ss20

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A minute from the Alta exit off the I-15!
First car to derail in this sure-to-be loooooooong train wreck:

http://http://www.newenglandskiindustry.com/viewstory.php?storyid=198

Just two and a half weeks after its IPO, Peak Resorts (NASDAQ: SKIS) has announced it will pay a cash dividend to shareholders. 13.75 cents per share will be paid on February 20, 2015. As of December 10, shares have dropped $1.38 since the IPO. Current market capital is $106.54 million.

The surprise cash payout comes despite having $175 million in long term debt (most of it at 10% interest).
 

snoseek

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I'm kinda dumb about Economics but if shares are dropping is it normal to pay a dividend?
 

joshua segal

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I'm kinda dumb about Economics but if shares are dropping is it normal to pay a dividend?
The price of the shares have nothing to do with declaring a dividend. Profitability does. As far as I know, ASC never paid a dividend!

GM continued to pay dividends when both their stock price and earnings were in the tank - and many banks who were losing billions during the meltdown, continued to pay symbolic dividends.

All-in-all, I see it as a good sign.
 

snoseek

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I guess this is how Vail Resorts enters the East Coast market...
 

BenedictGomez

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Holy crap, this thing actually made it to market?

Another sure-fire sign that we're near the top. I moved partially to cash a few weeks ago. Don't even care if the market goes up all 2015. Also boosted a levered short position a little bit.
 

BenedictGomez

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I'm kinda dumb about Economics but if shares are dropping is it normal to pay a dividend?

No. But in this particular instance? I definitely view it as unusual.

I'm a little perplexed frankly, and I don't see any plausible argument on the "pro" side of this being an intelligent use of cash in their situation. My speculation is that Peak believes they need to offer the divident to lend a level of support to their stock, because frankly, they know it's not a great investment.
 

yeggous

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No. But in this particular instance? I definitely view it as unusual.

I'm a little perplexed frankly, and I don't see any plausible argument on the "pro" side of this being an intelligent use of cash in their situation. My speculation is that Peak believes they need to offer the divident to lend a level of support to their stock, because frankly, they know it's not a great investment.

This.


Sent from my iPad using AlpineZone mobile app
 

Higgl

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I for one REALLY don't want to see Peak Resorts fail. Think what you want about Mount Snow, but Peak has turned Wildcat around to a degree I never though possible this season, given it's early yet. I'm a huge fan of their success with Crotched too. I like the moves Stenger has made overall. He's investing in the industry, which until literally this summer, many owners had not been investing in as seen by the significant lack of lift upgrades from 2005 to 2013. I don't believe the successful resorts fifteen years from now are going to be the ones who sat still during the early 2000s.
 

Higgl

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Though this news turn of events with Peak and the IPO has me worried... Hence the reason I'm on here wailing that I don't want to see Peak implode because it's looking decently probable right now :(
 

yeggous

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Though this news turn of events with Peak and the IPO has me worried... Hence the reason I'm on here wailing that I don't want to see Peak implode because it's looking decently probable right now :(

I hear you. The reason that I worry is the same reason that I love Crotched and Wildcat. They have great snow, fast lifts, and no crowds. Neither has lodging, fancy restaurants, or lots of retail. I just don't see how they make money. Actually I might believe that Crotched makes money given it's ability to bring in revenue from night skiing. Wildcat, on the other hand, I don't get. My only guess is that it is being operated as a loss leader to drive more business for Attitash. It gives Peak Resorts and an early and late season base of operations to help sell season passes and save having to operate Attitash with its higher overhead costs. It also provides a marketing advantage to differentiate Attitash over the competition, or at least it used to until the advent of the White Mountain Superpass.
 

joshua segal

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... Actually I might believe that Crotched makes money given it's ability to bring in revenue from night skiing. ...
While Crotched does an excellent night skiing business, Crotched has accessibility to major population centers. Greater Manchester/Nashua Metropolitan Area is over 500,000 people, Keene is nearby to the west and it's just over an hour for the northern MA suburbs. One of the largest mistakes of the pre-Peak Resorts Crotched Mountain was their push on real estate both on the East side and West sides. Peak Resorts recognizes that their business is skiing and not real estate development. ASC got into trouble when they stressed the real estate business and forgot (or sublimated) that they were in the skiing business.
 
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