Royal Caribbean Cruises Ltd. announced Tuesday morning that it has decided to extend the suspension of most sailings through September 15. The announcement said Chinese sails are suspended through the end of July, and sailings on its Bermuda line won’t reopen until October 31.
This comes days after Cruise Lines International Association (CLIA) said most cruise lines would voluntarily extend the suspension of operations from US ports until September 15.
With the risks of a second coronavirus wave emerging in the US, Royal Caribbean appears to be delaying the Bermuda line about 45 days after CLIA’s September 15 extension. If a full-blown virus pandemic is seen by fall, it would suggest the Bermuda segment could be offline for the remainder of the year.
Royal Caribbean shares have jumped nearly 300% since the low (19.25) on March 18 to a high of 75.48 on June 8. Price has since slid 33% to the 52 handle on Tuesday – as it becomes evident, investors got way ahead of fundamentals.
Since Barstool Sports founder Dave Portnoy, the biggest cruise line bull on social media, told his 1.5 followers “cruise ships are poised for take-off again” – share price in Royal Caribbean initially popped on his tweet but has subsided to pre-tweet levels.
Royal Caribbean has been a top favorite stock among Robinhood traders – account holders went from 4,000 at the start of March to nearly 240,000 on June 22.
With no vaccine and the emergence of confirmed virus cases, the cruise industry will remain dead this year – any more extensions for the industry could be devastating, especially for equity holders, and likely result in a reverse of share price for many cruise ship stocks, which would leave a generation of millennial traders as bagholders.