Six Flags: A Rather Wearisome Proposition

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One is, frankly, exhausted by the relentless optimism surrounding the American economy. The Atlanta Federal Reserve predicts a fourth-quarter GDP surge of 5.3%? How utterly predictable. And while a surge in ‘animal spirits,’ as they so quaintly put it, might briefly amuse the market, one suspects it’s a rather flimsy foundation upon which to build any lasting confidence. Certain macroeconomic indicators suggest a decidedly less cheerful narrative, particularly when one observes the decidedly pinched expressions of the consumer.

Which brings us, rather reluctantly, to Six Flags Entertainment (FUN +4.34%). The share price has enjoyed a fleeting, almost pathetic, rally to start 2026. A mere six percent. One is tempted to dismiss it as a mirage, and frankly, one suspects one would be correct. The stock has shed two-thirds of its value in the last twelve months, and a business so utterly dependent on discretionary spending is hardly a comforting prospect when consumers are displaying a distinct lack of… enthusiasm.

The latest report from Jefferies‘ U.S. Consumer Pulse survey confirms the growing suspicion. Declines across all categories, with a ‘sharp’ retrenchment in net buying conditions. Really. It’s all terribly predictable. People are being prudent, conserving funds, and generally behaving as if they possess a modicum of sense. Hardly ideal for a company whose entire business model revolves around encouraging people to scream on rollercoasters.

A Labouring Point

The employment figures, while superficially encouraging, conceal a rather unsettling undercurrent. Unemployment at 4.4%? Perfectly respectable, one supposes. But delve a little deeper, and one discovers cracks appearing in the façade. The market for young adults – those crucial 18- to 24-year-olds – is as dismal as it was during the regrettable pandemic. A rather telling sign, wouldn’t you agree? And wage growth at smaller companies barely keeping pace with inflation? The situation is becoming positively… tiresome.

Combine these factors, and one begins to suspect that the stars are decidedly not aligning for Six Flags. Even some sell-side analysts are beginning to notice. David Katz of Jefferies, in a report on January 13th, lowered his fiscal 2027 forecasts for Six Flags’ adjusted EBITDA, attendance, and revenue by 9%, 3%, and 4% respectively. A rather damning indictment, wouldn’t you say?

A Flickering Hope?

Six Flags is, to its credit, exhibiting a degree of financial prudence. The decision not to exercise an option to acquire complete control of Six Flags Over Texas is, at least, a sign that someone is paying attention to the bottom line. Though one suspects it was more a matter of not wanting to throw good money after bad.

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The company has other levers to pull, of course. The suggestion of spinning off its real estate holdings into a REIT, or selling them to an operator like Vici Properties, is… intriguing. Jonathan Litt of Land & Buildings Investment Management is, one must concede, a rather astute observer. The idea of freeing up capital and allowing the operating company to stand alone, or perhaps even attracting a buyer from the private equity world, is not entirely without merit.

Whether Six Flags will actually consider these moves is, of course, another matter entirely. One suspects a certain degree of inertia will prevail. But one can always hope for a touch of… imagination. Though, frankly, one isn’t holding one’s breath. It would be far too… exhausting.

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2026-01-19 20:52