Investors again call for sell-off at Six Flags

The useful part

You're getting roller coasters, cheap annual passes, and high prices inside the parks to make up for those cheap annual passes. So longtime Six Flags fans will express exactly zero surprise at this week's Wall Street Journal report that activist investor Jana Partners is demanding that Six Flags explore a sale. Jana is the firm that last year brought in Travis Kelce as a celebrity spokesperson for the chain, after Jana bought a reported 9% stake in the company.

How it works

• Except Six Flags' stock price is down 43% in the past year, so Jana's call feels more like cutting a loss than cashing in.
• Perhaps by calling for a sale, Jana can gin up a little merger & acquisition speculation to drive the FUN stock price?
• Interest charges on the company's nearly $5 billion debt are wiping out its profits.
• Pandemic debt pushed the old Cedar Fair and Six Flags companies to merge, in the hopes that operational efficiency would help the new company better manage that debt.
• Six Flags has closed or sold parks in an effort to get profitable, and while its individual remaining parks are making money, that's not enough to pay off its massive debt.

What to take from it

Other investors have urged the company to sell its real estate to cover the debt, but that would leave the company saddled with ever-increasing rent payments. Basically, a real estate sale would be swapping one crippling financial burden for another one. (Real estate sell-offs are one of the main ways that private equity companies devour and...

Details worth keeping

That's your pump, and the proposed sale would be the dump.