Please ensure Javascript is enabled for purposes of website accessibility

Here's Why SeaWorld Entertainment, Inc. Stock Jumped 16.4% in March

By Daniel B. Kline - Apr 5, 2016 at 10:15AM

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 company has finally given into public pressure and will get rid of its signature killer whales.

Since the 2013 documentary Blackfish highlighted how it treats the killer whales (Orcas) it holds in captivity SeaWorld Entertainment (SEAS -3.43%) has been reeling.

Source: YCharts.com

What: The controversy over the Orca, the animal which SeaWorld tied its identity to, has been very bad for the chain. That's not the only reason its stock has suffered -- new attractions at Universal Studios and Walt Disney World have sucked business from lesser parks in general -- but it was the driving catalyst. Because the killer whales were so integral to the company SeaWorld did not respond well to the Blackfish controversy. Instead of quickly giving into the inevitable, the company dug its heels in, Washington Redskins-style , and refused to make any real changes.

That however finally changed in mid-March as the company finally announced plans to end its Orca program. On that news, shares in SeaWorld which closed February at $18.09 finished March at $21.06, a 16.4% gain, according to data provided by S&P Global Market Intelligence.

So what: SeaWorld won't be returning its current orcas to the wild, but it has stopped its breeding program and announced that this generation of killers whales will be the last under its care. The company also plans to stop using the whales in theatrical shows and intends to "introduce new, inspiring, natural orca encounters," according to a press release. These changes begin in its San Diego park in 2017, followed by San Antonio, and then Orlando in 2019.

"SeaWorld has introduced more than 400 million guests to orcas, and we are proud of our part in contributing to the human understanding of these animals," said CEO Joel Manby "As society's understanding of orcas continues to change, SeaWorld is changing with it. By making this the last generation of orcas in our care and reimagining how guests will encounter these beautiful animals, we are fulfilling our mission of providing visitors to our parks with experiences that matter."

Now what: Whether SeaWorld's business recovers depends upon whether the public accepts its very belated efforts to stop its perceived exploitation of orcas. That however is only a small piece of the battle as the theme park company has to do more than remove a reason for people not to visit. It also needs to offer one that makes it worthwhile to attend.

At a time when its two major rivals have Harry Potter attractions and are adding massive Star Wars lands respectively that is going to be a major challenge. This is however an important first step in the rebuild which at least puts SeaWorld back heading toward the possibility of competing.

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.
SEAS
$52.88 (-3.43%) $-1.88

*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 service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/23/2022.

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.