ski guyBUY A MAGIC MOUNTAIN
August 10th 2009 12:18
BUY A MAGIC MOUNTAIN
What happens when a struggling mid-sized New England SKI area constantly loses money every season? Well, usually one of four things could happen. In the best case scenario the current owners could sell it to a corporation with deeper pockets and the expertise to turn the place around. Or, they can take down the lifts and sell them along with other expensive specialized equipment to other ski areas and sell the land for alternative commercial or residential uses.
Sometimes though, greedy bankers holding the ski area's mortgage get nervous waiting
and decide to foreclose on the place, in effect locking the doors until the place can be sold
at fire-sale auction prices.
However, there is the unusual fourth case scenario. The current owners say to their
loyal customers, "hey, if you like this mountain so much buy it from us. We are willing
to sell you affordable shares at three grand a pop. We'll still operate the place but you
get to have a vote on the Board of Directors and share in the profit and losses. How's
that sound to you? Pretty good deal, huh, huh?"
It sounds far fetched but that's what happened at Vermont's Mad River Glen Ski Area in the 1990s. The place is now owned by a cooperative of individual share holders and operates more or less in the black.
Now, struggling Magic Mountain in Londonderry, Vermont has filed the federal paperwork
necessary to sell 333 shares at $3,000 each to the public. If this initial capital raising
effort is successful, the current owners have plans to followup with a $2 million offering.
Who knows? It could work. Magic Mountain has challenging classic New England
trails designed by the mountain's founder, a cantankerous old Swiss ski instructor
named Hans Thorner. And it's just far enough off the beaten track that the mountain is not infested with hoards of out of control skiers and snowboarders every weekend like some of its nearby competitors. What it needs though is new lifts and much more snowmaking
firepower.
Stay tuned............
What happens when a struggling mid-sized New England SKI area constantly loses money every season? Well, usually one of four things could happen. In the best case scenario the current owners could sell it to a corporation with deeper pockets and the expertise to turn the place around. Or, they can take down the lifts and sell them along with other expensive specialized equipment to other ski areas and sell the land for alternative commercial or residential uses.
Sometimes though, greedy bankers holding the ski area's mortgage get nervous waiting
and decide to foreclose on the place, in effect locking the doors until the place can be sold
However, there is the unusual fourth case scenario. The current owners say to their
loyal customers, "hey, if you like this mountain so much buy it from us. We are willing
to sell you affordable shares at three grand a pop. We'll still operate the place but you
get to have a vote on the Board of Directors and share in the profit and losses. How's
that sound to you? Pretty good deal, huh, huh?"
It sounds far fetched but that's what happened at Vermont's Mad River Glen Ski Area in the 1990s. The place is now owned by a cooperative of individual share holders and operates more or less in the black.
Now, struggling Magic Mountain in Londonderry, Vermont has filed the federal paperwork
necessary to sell 333 shares at $3,000 each to the public. If this initial capital raising
effort is successful, the current owners have plans to followup with a $2 million offering.
Who knows? It could work. Magic Mountain has challenging classic New England
trails designed by the mountain's founder, a cantankerous old Swiss ski instructor
firepower.
Stay tuned............
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