Why Six Flags, Cedar Fair, and SeaWorld Stock Dropped Today

What happened 

Amusement park stocks fell on Monday, as rising COVID-19 case counts threaten to derail the beleaguered industry's recovery. By the close of trading, shares of SeaWorld (NYSE: SEAS), Six Flags (NYSE: SIX), and Cedar Fair (NYSE: FUN) were down 9.8%, 7.6%, and 4.1%, respectively.

So what 

Nearly 1 million people have died from the coronavirus, including approximately 200,000 Americans. Surging COVID-19 cases in several European countries threaten to drive those figures even higher. Government officials, desperate to minimize the spread of the virus, are considering new lockdown restrictions. 

A chain with the word

More COVID-19 cases could mean more trouble for amusement park investors. Image source: Getty Images.

None of this bodes well for amusement park companies, who rely on huge crowds funneling into their rides and attractions to generate a profit. The industry has been devastated by coronavirus-related park closures and reduced crowds during its key summer season. Now, a new wave of COVID-19 cases threatens to derail park operators' upcoming Halloween festivities. 

Now what 

Six Flags, Cedar Fair, and SeaWorld have all suffered heavy losses in recent quarters. Capacity restrictions and increased coronavirus-related cleaning and safety expenses are likely to continue to weigh on their profits in the quarters ahead. And if fears of getting sick lead more people to steer clear of amusement parks in the fall, the industry's struggles could be even worse than feared.

For these reasons, Six Flags, Cedar Fair, and SeaWorld are likely to remain high-risk stocks until a safe and effective vaccine or treatment for COVID-19 is developed.

10 stocks we like better than Six Flags
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Six Flags wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of August 1, 2020


Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Cedar Fair. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.