It was recently discovered that Covid-19 was found on board a Carnival cruise. The U.S. Centers for Disease Control and Prevention (CDC) has launched an inquiry. As a result, in the last five trading days, Carnival Corp’s (NYSE:CCL) stock fell 15.5%, and it doesn’t look like the losses will stop anytime soon.
The Carnival Spirit arrived in Seattle on May 3 after sailing from Miami. According to the company, the cruise ship Carnival Spirit held 2,124 guests and 930 crew members.
The CDC is not revealing the number of people under quarantine or how many tested positive. However, the ship is at an orange status. It is a special designation assigned when 0.3% or more of all passengers or crew onboard test positive for one strain of the virus.
Round-trip cruises are a popular vacation for any summertime destination, and there have not been any reports of serious health issues among those who recently went on the cruise.
Nevertheless, in this case, some passengers also felt that crews weren’t properly handling the Covid-19 outbreak on the cruise. Some passengers think they did not get proper treatment, and one claims his companion was told there aren’t any more isolation rooms available.
Overall, this piece of news has had a hugely negative impact on CCL stock. You cannot blame the markets. For almost two years, investors and consumers have waited with bated breath for the return of cruises. All parties involved knew that there was little room for error. Unfortunately, for CCL stock, this event will haunt the company for several weeks to come.
You do not need to see the price chart or financial data to know that CCL is in trouble. The company got top marks for the recent Carnival Cruise Line booking week, with the one week from March 28 to April 3 as the line’s busiest in 50 years. It beat the previous record by double digits and gave reason to believe CCL was out of the woods.
However, the comeback party will take longer. The markets are heavily sensitive these days to negative headlines. Plus, cruise lines have a lot to prove, considering they were the epicenters of certain outbreaks. Hence, it’s better to ignore CCL stock right now.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.