Why Cedar Fair Stock Was a Winner on Wednesday

Like a roller coaster in a rush to climb a track, theme park operator Cedar Fair‘s (FUN 5.66%) stock quickly rose high on Hump Day. Investors were excited about a potential merger with a near-equal, and that feeling propelled the shares to an almost 6% price gain on the day.

The hot rumor is that Cedar Fair and Six Flags will become one

An article published that day in The Wall Street Journal, citing unnamed “people familiar with the matter,” stated that Cedar Fair is about to close a deal to merge with Six Flags (SIX 5.53%). Those sources that that such an arrangement could be finalized by the end of this week.

Perhaps not coincidentally, Cedar Fair is slated to publish its latest set of quarterly results Thursday morning.

Reuters also posted an article stating that the two theme park companies were on the brink of combining.

The pair have discussed merging previously, perhaps most notably in a 2019 set of discussions. The Reuters article’s sources, also identified only as “people familiar with the matter,” said that there is no guarantee an official tie-up will happen with the current talks.

A merger of almost-equals

Six Flags and Cedar Fair have similar business profiles, although the latter also operates a portfolio of hotels. The two boast similar market caps (of just under $2 billion) and tend to cater to local/regional markets as opposed to a vast nationwide (and worldwide) visitor base like entertainment giant Walt Disney’s (DIS -0.64%) popular theme parks.

Following those media reports, we can bet that more than the usual number of interested parties will tune in to Cedar Fair’s quarterly earnings conference call. This will take place on Thursday at 10 a.m. Eastern time.

Eric Volkman has positions in Walt Disney. The Motley Fool has positions in and recommends Six Flags Entertainment and Walt Disney. The Motley Fool recommends Cedar Fair. The Motley Fool has a disclosure policy.

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