Six Flags Stock Drops 3.4% as X2 Coaster Closure Deepens Injury Crisis

Six Flags Entertainment (SIX) shares dropped 3.4% to $32.00 on August 27 as the company faces mounting pressure from the closure of its X2 roller coaster at Magic Mountain in Valencia, California. A CNN investigation revealed the ride has been linked to more than a dozen serious injuries and hospitalizations over nearly two decades, including two recent brain hemorrhage cases that forced emergency surgeries. The closure since July 12 threatens near-term revenue while exposing the company to significant legal liability.

Two brain hemorrhages in six days prompt closure

Two women suffered severe subdural hematomas requiring emergency brain surgery within six days of each other in July after riding X2. Pamela Guillen, 40, from Hawaii, lost consciousness and spent two weeks in a coma before beginning recovery. Naomi Greer-Wilkinson, 25, from Los Angeles, remains in critical condition in a coma. Three neurosurgeons treating the women stated the injuries were caused by “traumatic rapid acceleration-deceleration events” on the ride, similar to high-speed collisions.

Long history of serious injuries and deaths

A CNN investigation found X2 linked to more than a dozen reports of serious injuries and hospitalizations over nearly two decades. Two riders in their twenties died from brain injuries, though one had a preexisting brain abnormality. Internal Six Flags records listed at least 70 head and neck injury complaints between 2019 and 2022. The ride, which opened in 2002 and was voted “Coaster of the Year,” features 360-degree rotating seats and speeds approaching 80 mph.

Six Flags defends ride as regulators investigate

Six Flags has argued that X2 meets industry safety regulations, is regularly tested, and carries warning signs about inherent risks. The company’s attorneys contend that forces generated by the ride cannot cause brain injury in a “normal” rider using it “as instructed.” However, the father of one injured rider stated “It’s got to stop” after Six Flags kept the coaster open following the first July injury. California regulators are conducting an ongoing inspection.

Stock faces pressure amid legal and operational risks

Meyka grades SIX a B with a 12-month forecast of $11.54, suggesting limited upside from current levels. The stock trades at a 37.2x trailing PE ratio with negative shareholder equity of negative $10.78 per share, reflecting heavy debt of $2.45 billion against a $2.7 billion market cap. The X2 closure removes revenue from a flagship attraction while pending lawsuits, including at least one death case, create significant contingent liabilities not yet quantified in earnings.

Final Thoughts

The X2 closure and CNN investigation expose Six Flags to both immediate revenue loss and long-term legal risk. With Meyka grading the stock a B and forecasting $11.54 annually, the data suggests downside risk outweighs recovery potential near term.

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