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Price Forecast:

Bullish Case: The merger with Six Flags is likely to drive operational efficiencies and boost attendance, supported by upcoming new attractions that enhance customer experience, potentially leading to market optimism and significant price rebounds.

Bearish Case: Challenges in integration and persisting low visitor numbers may hinder profitability post-merger. Market skepticism could continue if capital investments do not yield expected growth, leading to further downside in FUN's stock performance.

Potential Outcomes:

1. Successful merger synergy leading to 25% price rebound, 70% chance;

2. Continued integration problems with a possible 15% price drop, 20% chance;

3. Regulatory challenges delaying operational strategies, 10% chance.

Trading Oracle: Consider a bullish debit spread on FUN options, buying $45 calls and selling $50 calls. The high implied volatility suggests potential upward momentum driven by the merger's optimism. Target a September expiration for quicker gains with a favorable risk/reward ratio.

September 19, 2024