American Skiing Co. stock was volatile
July 25, 2007
On Tuesday, shares of American Skiing Company stock were trading for six cents. With the company set to cease operations, soon the stock won’t be trading at all.
"We plan to have it stop trading," Dave Hirasawa, director of investor relations and financial analysis, said in a telephone interview Tuesday.
But Hirasawa stressed that the price of the stock doesn’t always reflect the company’s financial strength.
Still, the price of the stock, which trades on the Over the Counter Bulletin Board under the ticker symbol AESK, dropped dramatically since American Skiing Company went public in 1997, said Derrell Reeves, an investment adviser at Paulson Investment in Park City.
In the past decade, financial charts show the stock price sliding steeply.
On Nov. 6, 1997, the first day of public trading, stock in American Skiing Company, which is in the process of dissolving, reached a high of $18.25. On the same day the next year the price of the stock fell to $9.13 per share.
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In that time, the value of nearly 16 million common shares available to the public dropped from about $292 million to $146 million.
By Nov. 6, 2001, on the eve of the Winter Olympics, shares in American Skiing Company were trading for 98 cents, according to ASC’s Web site at peaks.com.
In November 2003, the price was 11 cents, which meant the value of 16 million shares dropped to less than $1.8 million.
In 2005, the price had risen to 38 cents, but fell to 26 cents on Nov. 6, 2004.
Last year, American Skiing Co. spent $10 million improving The Canyons, Hirasawa said, adding that American Skiing Company also renegotiated much of its debt.
But after falling to one penny per share on Monday, Tuesday, stock in American Skiing Company traded for six cents.
"Their increased borrowing over the years continued to hurt the stock," Reeves said about debt American Skiing Co. incurred buying resorts.
But in the last eight months, as ASC officials liquidated nearly all assets, investors "could almost see the writing on the wall," Reeves explained.
"Some companies get too far extended," he said.
Last week, American Skiing Co. brass announced the pending sale of the company’s last resort, The Canyons, to Toronto-based Talisker Corp., the firm that developed Empire Pass.
Until then company executives wouldn’t confirm whether The Canyons was for sale. But a document filed last year by American Skiing Co. shows its board of directors authorized "the sale of resort assets" on June 13, 2006.
In the midst of a bitter courtroom battle with its landlord threatening to end ASC’s lease at The Canyons, American Skiing Company CEO B.J. Fair acknowledged in a Park Record guest editorial published on Aug. 25, 2006, that "ASC did undergo a period of financial difficulty some time ago."
"However, this is in the past," Fair wrote. "We have emerged solely focused on improving all of our resorts and continuing to grow The Canyons."
Statements from executives continued last December when ASC announced the sale of its Steamboat Ski and Resort Corporation to Intrawest ULC.
"It’s no secret that the company went through some financial challenges early on. But the last four, five years, that has not been the case," said Fair at the time of the Steamboat sale. "People try to relate to the ASC that they remember five or six years ago, and we’re a completely different company right now."
With sales pending last February of Steamboat, and ASC’s Killington, Attitash, Mount Snow and Pico resorts, American Skiing spokesman Chip Carey insisted the company was "lean" and "mean." Around that time the stock price jumped to $1.10.
"A lot of people thought that meant the company would continue to be a public company," Reeves said, adding that some of his clients sold shares when the stock hit the 52-week high. "It was all just said in thought, and not very good thought."
Hirasawa said he wouldn’t speculate about whether the optimistic statements encouraged people to purchase stock in the company.
"I can’t speculate about how people make their investment decisions," he said.