SeaWorld Entertainment (SEAS) named former Carnival (CCL) Chief Operating Officer Gus Antorcha as its new chief executive officer. The theme park operator had been without a permanent CEO for almost a year.
PERMANENT CEO NAMED: SeaWorld on Tuesday afternoon said it has named Gustavo Antorcha as CEO. Antorcha, who previously served as Carnival's COO, will take the helm on February 18. John Reilly, who had served as interim CEO, will become SeaWorld's COO. In a statement, Antorcha said he is "excited to join the SeaWorld team. SeaWorld has an irreplaceable portfolio of incredibly valuable assets and brands and provides guests with highly differentiated and inspiring experiences. The organization has an outstanding group of dedicated employees who, together, have a clear focus on improving execution, enhancing the guest experience and growing revenue, profitability and free cash flow." He added that "I am deeply impressed by the Company's commitment to animal welfare, conservation, rescue and education, and I am proud to be working with the more than 1,000 veterinarians, zoologists and other animal care specialists who devote their lives every day to animal care at SeaWorld."
WHAT'S NOTABLE: In September, the company and its former CEO agreed to pay more than $5M to settle an SEC lawsuit in which the regulator alleged that they failed to disclose to shareholders the impact on its business from 2013 documentary film "Blackfish." The 2013 film was highly critical of the company's treatment of its orcas. The SEC said SeaWorld waited until August 2014 to acknowledge declining attendance caused in part by negative publicity. The 2013 documentary, coupled with protests from People for the Ethical Treatment of Animals and other groups, prompted companies to cut their sponsorship ties with the parks, performers to cancel concerts and a legislative attempt to ban whales in captivity in California. SeaWorld hired Joel Manby in 2016 as its new CEO, and he halted breeding of killer whales and introduced rides that didn't involve live animals. Despite the efforts, SeaWorld continued to struggle to improve attendance. Manby stepped down in 2018.
Last week, SeaWorld said Kayla, a 30-year-old orca, died at SeaWorld Orlando after developing a sudden illness. "Although animal care specialists and veterinarians devoted around the clock attention to Kayla, she did not survive," SeaWorld Orlando said in a statement. Kayla is the fourth orca to die at a SeaWorld park in the last two years. Dr. Naomi Rose, a marine-mammal scientist at the Animal Welfare Institute, which has been critical of SeaWorld, told the Orlando Sentinel that Kayla was the second oldest captive-born orca ever. Rose said that "30 is prime of life" for a female orca, who have been known to live up to 80 or 90 years. "That’s like literally being a 30-year-old woman. Dying at 30 is not normal," Rose contended.
CEO APPOINTMENT REMOVES OVERHANG: Stifel analyst Steven Wieczynski welcomed the CEO news, telling investors that he believes Antorcha's appointment removes a significant long-term overhang. However, he also said he suspects the announcement could have a modestly negative short-term implication for the stock, as he believes some shorter-term focused investors believed the delays in naming a permanent CEO were a sign of leadership actively shopping the company. Although Wieczynski thinks lingering uncertainty over the potential impact of the Zhonghong lock-up expiration in May could remain a near-term overhang, he sees considerable long-term upside for patient shareholders.
PRICE ACTION: In early trading, shares of SeaWorld Entertainment are fractionally lower to $26.75.
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