Many industries are being pushed to the brink as governments have enacted draconian measures to stem the tide of the COVID-19 outbreak across the developed world.
There are few industries that face the existential crisis that cruise liners do right now. Industry leaders have already lobbied the United States government for a bailout as a stimulus package worth up to $2 trillion is still being negotiated.
Cruise stocks have been battered in the later winter. Royal Caribbean Cruises (NYSE:RCL) stock has dropped 28% month-over-month as of close on March 20. This plunge has wiped out nearly all its gains from the financial crisis in the late 2000s. The company recently announced that it was halting new cruises for the next 30 days.
Norwegian Cruise Line (NYSE:NCLH) stock has plummeted 82% over the past month. It also announced a temporary suspension of operations in response to the COVID-19 outbreak. To make matters worse, the company suffered a data breach this past week. The most recent stock plunge has wiped out its gains since its IPO in 2013.
The U.S. Senate failed to come to an agreement on a bailout in its weekend session. Pressure is mounting to get the stimulus passed into law as industries are reeling from lockdowns. The cruise industry is near the top of the list, and it is likely it will receive some relief. However, until there is a light at the end of the lockdown tunnel, investors should sit on their hands in this volatile market.
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