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Why Carnival Stock Dropped Today

By Rich Smith – Aug 30, 2021 at 11:24AM

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The pandemic isn't over yet, but the lawsuits are just beginning.

What happened

Shares of cruise line operator Carnival Corporation (CCL 0.30%) (CUK -0.34%) stock dropped 2.2% in 10:15 a.m. EDT trading Monday after The Financial Times reported that 50 Carnival passengers have filed a class action lawsuit against the company alleging that it "failed to protect passengers" from COVID-19 on a recent cruise.  

And by recent I mean February 2020 -- back before most people even knew COVID was a thing.

Collage showing a cruise ship, a man in a face mask and a microbe.

Image source: Getty Images.

So what

This lawsuit, you see, refers to the Carnival Grand Princess cruise liner that was famously denied entry to San Francisco in the early days of the pandemic.

As alleged in the lawsuit, despite no one quite knowing what COVID-19 was at the time, the senior doctor aboard the liner advised company management of a "concerning" spread of an "influenza-like illness" aboard. The doctor asked if she should take "any additional measures" to keep passengers safe, but management told her the ship could keep on sailing -- and even threatened passengers booked aboard a subsequent cruise with a 90% cancellation fee if they did not board.

Ultimately, two passengers died and more than 100 passengers and crew became ill aboard the liner across the course of two back-to-back cruises before the CDC banned further cruising.

Now what

Whether Carnival can be faulted for failing to foresee the danger of a pandemic that few realized was even happening at the time is not for me to say. But the fact that this new lawsuit concerns a cruise that happened 18 months ago does suggest that it may only be the first of many that are still to come.

And Carnival stock (and others) could be cruising for a bruising.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy.

Stocks Mentioned

Carnival & Plc Stock Quote
Carnival & Plc
CCL
$10.00 (0.30%) $0.03
Carnival & Plc Stock Quote
Carnival & Plc
CUK
$8.92 (-0.34%) $0.03

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