Royal Caribbean Cruises Ltd.
Lead Plaintiff Deadline: 12/07/2020
SUMMARY OF CASE:
A securities class action has been filed against Royal Caribbean Cruises Ltd. (RCL) on behalf of all persons or entities who purchased or otherwise acquired Royal Caribbean securities between February 4, 2020 through March 17, 2020. This case has been filed in the USDC – S.D. Fla.
Royal Caribbean is the world’s second largest cruise company, operating 61 cruise ships which visit over 1,000 destinations across all seven continents. Following the outbreak of COVID-19 in China, cruise companies, including Royal Caribbean, began to cancel voyages in that region, and customer bookings were declining globally as vacationers worried about the global spread of the virus.
The Complaint alleges that, from February 4, 2020 through March 17, 2020, Defendants failed to disclose material facts about the Company’s decrease in bookings outside China, instead maintaining that it was only experiencing a slowdown in bookings from China. The Action further alleges that Defendants failed to disclose material facts about the Company’s inadequate policies and procedures to prevent the spread of COVID-19 on its ships.
The truth about the scope of the impact that COVID-19 had on the Company’s overall bookings and the inability of Royal Caribbean to prevent the virus’ spread on its ships was revealed through a series of disclosures. First, on February 13, 2020, Royal Caribbean issued a press release stating that it had canceled 18 voyages in Southeast Asia due to recent travel restrictions and further warning that recent bookings had been softer for its broader business. On this news, Royal Caribbean shares fell over 3 percent.
Second, on February 25, 2020, Royal Caribbean filed its 2019 Form 10-K, indicating that COVID-19 concerns were negatively impacting its overall business. On this news, Royal Caribbean shares fell over 14 percent.
Third, on March 10, 2020, Royal Caribbean withdrew its 2020 financial guidance, increased its revolving credit facility by $550 million, and announced that it would take cost-cutting actions due to the proliferation of COVID-19, further revealing that COVID-19 was severely impacting Royal Caribbean’s 2020 customer booking and that its safety measures were inadequate to prevent the spread of the virus on its ships. On this news, Royal Caribbean shares fell over 14 percent.
Fourth, on March 11, 2020, Royal Caribbean’s largest competitor, Carnival, announced a 60-day suspension of all operations, prompting concern that Royal Caribbean would follow suit. At the same time, Royal Caribbean also cancelled two cruises, beginning a series of cancellations and suspensions to follow. On this news, Royal Caribbean shares fell almost 32 percent.
Fifth, on March 14, 2020, Royal Caribbean announced a suspension of all global cruises for 30 days. On this news, Royal Caribbean stock fell over 7 percent.
Sixth, on March 16, 2020, the Company revealed that global operations could be suspended longer than anticipated, announcing the cancellations of two additional cruises throughout April and into May. On this news, Royal Caribbean shares fell over 7 percent.
Finally, on March 18, 2020, analysts downgraded Royal Caribbean’s stock and slashed their price targets. On this news, Royal Caribbean shares fell more than 19 percent.