Six Flags ($FUN): A Turnaround or a Value Trap? This is my thesis on a medium to long-term, long position on $FUN

Original Reddit comment

Author rejects the $FUN long thesis as a hard pass because post-merger leverage leaves the company vulnerable to bankruptcy in a recession.

FUN — AVOID The author argues Six Flags is no longer the same company after the Cedar Fair merger and should not be judged on past price history. He cites LTD/EBITDA of 7.2x as the basis for a hard pass, arguing the company is one recession away from bankruptcy even if the recession is not severe. The investment mechanism is balance-sheet fragility from the post-merger debt load.

It’s a completely different company post merger with Cedar Fair. LTD/EVITDA of 7.2x. That’s a hard pass. They are one recession away from bankruptcy and it doesn’t have to be a bad recession.