The new owners of the Loudon racetrack have invested millions in upgrades since purchasing the track in January and already have their sights set on another acquisition, despite a significant drop in the company's stock price and concern from credit analysts about its increasing debt.

Just months after Speedway Motorsports Inc. bought New Hampshire International Speedway for $340 million, the company announced another major deal to buy the Kentucky Speedway and bring a Sprint Cup race to the track.

But SMI stock has tumbled 40 percent since the New Hampshire deal was announced, and Standard & Poor's credit rating service is keeping an eye on the company amid concerns that it might be spending too much money on a project that won't yield significant revenue for a couple of years.

A downturn in the economy, drop in race attendance and uncertainty over next year's race schedule could all affect the company's stock price, one racing expert said.

Michael Pitts, a management professor at Virginia Commonwealth University who teaches a class on the business of NASCAR, said both SMI and its main competitor, International Speedway Corp., have experienced stock declines since last year.

But SMI has dropped faster, Pitts said, from a high of $41.68 in July 2007 to a $21.85 closing price on Wednesday. And the company's beta - a measure of a stock's volatility in relation to the market - is twice as high as International Speedway Corp. That means buying the stock could be twice as risky, but has the potential to provide double the returns, Pitts said.

Still, both stocks are more stable than the stock market, he said. Pitts compared the companies to Pepsi and Coke.

"Neither one of these companies look like they could go under at any time, because their tracks are worth something, and they're both profitable," Pitts said. The dip in stock prices is "probably that more people are worried about the economy, how long is it going to stay down, and they're probably worried about the fact that there's a lot of money you're spending, or borrowing, to buy race tracks and upgrade them."

The latest deal brings additional uncertainty because NASCAR - whose owners, the France family, also hold a major stake in International Speedway Corp. - has not promised to bring a Sprint Cup race to the Kentucky Speedway.

The current owners of the Kentucky track are embroiled in a legal battle with NASCAR and International Speedway, claiming the companies worked together to create a monopoly and prevent Kentucky from securing a Sprint Cup race. Speedway Motorsports Inc. owner O. Bruton Smith encouraged the current owners to drop the lawsuit, but they refused and NASCAR did not schedule a Sprint Cup race in Kentucky next year.

Although Kentucky already hosts a NASCAR Nationwide Series (formerly the Busch Series) race, the Sprint Cup race would have generated much more revenue for the track.

Now credit analysts at Standard's & Poor's are concerned Smith may be buying a track that won't generate significant income - at least, not enough to meet its debt obligations - until 2010. The rating service issued a report on June 18 announcing it may downgrade the company's BB+ credit rating.

Andy Liu, Standard & Poor's director of corporate ratings, said the amount of debt that SMI is taking on would be more than three times its earnings, making it more difficult to pay back debt and hampering its access to more credit.

"I think when SMI was originally upgraded to its BB+ credit rating a little over a year ago, we had expected a little more conservative financial policy," Liu said.

Even if the credit rating is downgraded, Liu said the rating is still pretty good. He said it would only affect SMI if the company wanted to refinance tomorrow; they might have to settle for a higher interest rate.

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