Six Flags Entertainment Corp. filed a class‑action lawsuit on November 5 2025, a filing that was publicly announced by the plaintiffs’ law firms on November 6 and 7. The suit, brought by investors who purchased the company’s common stock, accuses Six Flags of omitting material facts about the capital needs of Legacy Six Flags in the merger registration statement issued in connection with the July 1 2024 merger with Cedar Fair.
The lawsuit’s core allegations focus on chronic underinvestment and the need for millions of dollars in capital and operational expenditures beyond historical cost trends. It also claims that the CEO’s cost‑cutting measures, implemented under Selim Bassoul who took the helm in November 2021, degraded operational competence and guest experience. Investors who suffered substantial losses have until January 5 2026 to request appointment as lead plaintiff.
On the same day the lawsuit was announced, Six Flags released its Q3 2025 earnings. The company reported a net loss of $1.2 billion, or $11.77 per diluted share, versus an analyst consensus of $2.18. Revenue fell to $1.32 billion, a $20 million short of the $1.34 billion estimate. Adjusted EBITDA slipped to $555 million from $558 million in the prior year. The earnings miss reflects higher operating costs, the impact of legacy underinvestment, and the cost‑cutting initiatives that have strained park operations.
The earnings miss, combined with the lawsuit’s allegations, intensified investor concerns. After the release, the market reacted with a sharp decline in the company’s share price, reflecting the cumulative effect of the earnings shortfall and the perceived risk of undisclosed capital needs. The stock’s long‑term trajectory has already been affected, falling from just over $55 per share at the time of the merger to as low as $20, a nearly 64% drop.
Management has not yet issued a formal response to the lawsuit. In prior communications, Six Flags’ leadership emphasized cost discipline and strategic investments, but the current allegations suggest that these measures may have compromised operational quality and guest satisfaction. The lack of a timely statement adds to uncertainty among investors.
The lawsuit introduces significant legal and reputational risks. Potential damages and defense costs could strain the company’s financial resources, while the negative publicity may erode investor confidence and complicate the integration of Six Flags and Cedar Fair. The legal proceedings could also divert management’s attention from day‑to‑day operations and strategic initiatives.
Six Flags’ guidance for 2025 has been revised downward. The company now projects full‑year adjusted EBITDA of $780 million to $805 million, a reduction from the $860 million to $910 million range previously indicated in the Q2 2025 update. The guidance cut signals management’s concern about near‑term headwinds, including the ongoing capital needs and the impact of the lawsuit on the company’s financial outlook. The company also announced that President and CEO Richard Zimmerman will step down by the end of 2025, adding another layer of transition uncertainty.
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