Please ensure Javascript is enabled for purposes of website accessibility

Why SeaWorld Entertainment Inc. Stock Jumped Today

By Bradley Seth McNew - Mar 24, 2017 at 12:23PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The struggling theme park operator has had a rough couple of years, but one major investor is reportedly making a big bet.

What happened

Shares of SeaWorld Entertainment Inc. (SEAS -1.17%) were up as much as 11.1% in early trading on Friday after a report that a Chinese investment group is taking over a 21% stake in the company for $23 per share. As of 12:09 p.m. EDT, the stock had settled to a 6.6% gain. 

So what

According to an announcement by SeaWorld this morning, the Chinese conglomerate Zhonghong Zhuoye Group is taking over The Blackstone Group's (BX) 21% stake in Seaworld for nearly $430 million. Blackstone bought Seaworld in 2009, took the company public four years later, and has been selling parts of its stake in the company since. This sale will fully remove Blackstone's position in Seaworld. 

A group of children look into an aquarium filled with marine life

Image source: SeaWorld Entertainment.

SeaWorld Entertainment is the owner of 12 theme parks, including its flagship SeaWorld Parks but also a few other parks such as Busch Gardens. The company has struggled in recent years largely because of backlash over the company's use of animals -- particularly orcas in its iconic killer whale show. The company has said that it plans to phase out its orca shows and breeding program through 2019. 

Now what

While SeaWorld has struggled -- sales were down year over year for the last three years and the company reported a wider-than-expected loss for full-year 2016 -- other theme park companies have been thriving. Disney has seen its theme park segment rise steadily in recent years, and its new park in Shanghai, China, is expected to give a major boost to that segment going forward. Part of the interest in SeaWorld's deal seems to be the possibility of expansion in China as well, something that could potentially be a major boost for SeaWorld as the entertainment company continues to transition its struggling business.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

SeaWorld Entertainment, Inc. Stock Quote
SeaWorld Entertainment, Inc.
$46.36 (-1.17%) $0.55
The Blackstone Group L.P. Stock Quote
The Blackstone Group L.P.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.