Why Carnival Stock Kept Dropping Monday

What happened

Last week, Carnival (NYSE:CCL) (NYSE:CUK) announced that it had a COVID-19 outbreak involving 27 people on one of its operating cruise ships. That announcement helped ding the stock by almost 5% on Friday. The drop continued today, even after the company put out updated safety protocols over the weekend. Carnival shares dropped another 4% early Monday, but the stock pared its decline and remained down slightly more than 2% as of 10:25 a.m. EDT. 

So what

In response to the outbreak — which involved 26 vaccinated crew members and one vaccinated guest — and the continued spread of the delta variant in many places globally, Carnival updated its safety protocols over the weekend. But unlike some of its competitors, Carnival said it “will continue to welcome unvaccinated guests, including children under 12 who are not eligible for a vaccine.” That may not be an approach that investors think will ultimately benefit the cruise company. 

Image source: Getty Images.

Now what

The updated protocols call for even vaccinated guests to follow new testing requirements as of Aug. 14. Proof of vaccination must now also be accompanied by a negative COVID-19 PCR or antigen test result from within three days of embarkation. But the company is also allowing exemptions to the vaccination policy. 

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The procedures differ for unvaccinated guests. They must provide a negative PCR test at check-in that was taken between 72 hours and 24 hours prior to sailing. They must also test negative on an antigen test taken at embarkation and take another test within 24 hours of sailing on trips longer than four days. Those customers will be charged $150 per person for the additional testing. 

The vaccinated guests who tested positive last week either had mild symptoms or were asymptomatic. Some investors may think a worse outcome could occur with unvaccinated guests onboard, even with the added testing. That may be contributing to the added declines in the stock today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.


View more information: https://www.fool.com/investing/2021/08/16/why-carnival-stock-kept-dropping-monday/

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