Please ensure Javascript is enabled for purposes of website accessibility

Why Disney, Six Flags, Cedar Fair, and Other Amusement Park Stocks Dropped Today

By Joe Tenebruso – Jun 24, 2020 at 3:17PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Surging coronavirus cases are an ominous omen for the troubled industry.

What happened

Amusement park stocks fell on Wednesday, as COVID-19 case counts surged across the U.S. and around the world.

As of 2:20 p.m. EDT, shares of Cedar Fair (FUN -1.51%), SeaWorld (SEAS -3.02%), Six Flags (SIX -4.29%), and Disney (DIS -2.60%) were down 9%, 9%, 8%, and 5%, respectively. 

So what 

Leading infectious disease expert Dr. Anthony Fauci warned Congress on Tuesday that areas of the U.S. are experiencing a "disturbing surge" of novel coronavirus infection, including an alarming increase in COVID-19 complications among young people. With infection counts increasing rapidly in many states, some government officials are once again instructing people to stay home unless it's absolutely necessary to go elsewhere. 

An amusement park at night

Surging coronavirus infections could keep amusement parks relatively empty. Image source: Getty Images.

In addition to the many people who will likely choose to forego making trips to amusement parks this summer, park employees are paying attention to the rising COVID-19 case counts. Thousands of Disney World workers have signed a petition urging Disney to push back its planned reopening of the park in July. 

Now what 

Amusement park companies have taken great pains to increase safety measures at their parks, including new cleaning regimens and attendance caps to better allow for proper social distancing measures. However, the core of their business still relies on herding crowds of people into their parks. And until an effective treatment or vaccine for COVID-19 is found, many people will decide that making a trip to an amusement park is simply not worth the risk.

Unfortunately, that means the parks and resorts businesses of Six Flags, SeaWorld, Cedar Fair, and Disney remain at risk -- and investors should brace for the potential for more declines in the days and weeks ahead.

Joe Tenebruso owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool recommends Cedar Fair and recommends the following options: long January 2021 $60 calls on Walt Disney and short July 2020 $115 calls on Walt Disney. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$99.50 (-2.60%) $-2.66
Six Flags Entertainment Corporation Stock Quote
Six Flags Entertainment Corporation
SIX
$18.53 (-4.29%) $0.83
Cedar Fair, L.P. Stock Quote
Cedar Fair, L.P.
FUN
$40.48 (-1.51%) $0.62
SeaWorld Entertainment, Inc. Stock Quote
SeaWorld Entertainment, Inc.
SEAS
$47.90 (-3.02%) $-1.49

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.