What happened

Six Flags(NYSE:SIX) shares dramatically outperformed the market last month, soaring 60% compared to a 13% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally only erased a portion of shareholders' recent paper losses, though, with declines weighing in at 55% so far in 2020.

A roller coaster heading lower.

Image source: Getty Images.

So what

Investors became intensely pessimistic about the entertainment business following COVID-19 developments that forced closures of all of Six Flags' parks through most of the spring season. The shutdown has been generating significant financial pressure, which management has responded to by suspending the dividend and slashing costs.

Yet shares still rallied in April as Wall Street gained more confidence that the U.S. economy is on the verge of reopening, and potentially allowing for venues like Six Flags' parks to begin operating again through the summer.

Now what

On April 30, Six Flags announced plunging sales and expanded losses for the fiscal first quarter, which is a traditionally slow period in the industry. Management said at the time that its cash balances can easily support several months of paused operations. However, investors should approach this stock with skepticism as they wait for evidence that the consumer business can bounce back following the pandemic.