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Why Norwegian Cruise Line Stock Popped Again Today

By Rich Smith - Apr 6, 2021 at 1:04PM

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Norwegian isn't backing down from its demand that CDC lift the conditional sail order.

What happened

Yesterday, if you recall, cruise line stocks responded with a vengeance to new U.S. Centers for Disease Control guidance telling Americans it will be safe to travel domestically if they have received their COVID-19 vaccinations. At the same time, investors mostly ignored worries that new "technical guidance" hedged on whether this good news for travelers would also be good news for cruise lines -- which were told to remain cautious about restarting their operations.

Cruise lines pushed back on the latter comments, with Norwegian Cruise Line Holdings (NCLH 12.09%) in particular telling the CDC that it's ready to resume cruising on July 4 and promising to accept only fully vaccinated travelers aboard its cruise ships.

Cruise ship at sea

Image source: Getty Images.

So what

Investors responded to Norwegian's aggressive stance by bidding up the cruise line's shares 7.2%. Today they're buying even more Norwegian stock -- which is up another 5.1% in noonday trading, EDT.

Why?

This morning, Norwegian Cruise announced plans to resume cruising outside the United States, sailing out of Jamaica, the Dominican Republic, and Greece beginning in July 2021. Simultaneously it reiterated its exhortation for the CDC to permit it to resume sailing out of U.S. ports beginning July 4 and officially requested that the CDC "lift the Conditional Sail Order" on cruising in the U.S.  

The company described a new "robust, multi-layered SailSAFE health and safety program, which includes universal COVID-19 testing prior to embarkation" and announced "the formation of the SailSAFE Global Health and Wellness Council" to set safety standards for cruise lines operating in the age of COVID. 

Now what

As Norwegian Cruise asserted, "Mandatory vaccinations for all guests and crew, combined with universal testing and other preventative measures developed in conjunction with the HSP, will provide a uniquely safe and healthy vacation environment that it believes exceeds all other vacation choices on land and at sea."

Investors seem to agree with Norwegian on this point. Now let's see if it can convince the CDC.

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Norwegian Cruise Line Holdings Ltd. Stock Quote
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NCLH
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