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Carnival investors shrug off judge’s threat

The threat from U.S. District Court Judge Patricia Seitz sounds pretty stark: She might bar Carnival Corp. from temporarily docking its ships in U.S. ports for violating its probation.

The market’s reaction: Ho hum.

Shares of Carnival (NYSE: CCL) were trading at $52.95 on Friday morning after bottoming at $51.79 on Wednesday when Seitz made her threat. Carnival has been on probation for the past two years as part of a settlement after its Princess ships allegedly dumped oil.

Based on court filings, the Miami Herald reported that Carnival Corp. and its subsidiary cruise lines have sought to avoid unfavorable findings by preparing ships in advance of court-ordered audits, falsified records, dumped plastic garbage into the ocean and illegally discharged gray water into Glacier Bay National Park in Alaska.

Seitz said she wished she could have top Carnival executives visit a detention center for a few days. She wants Chairman Micky Arison and President Donald Arnold to appear at a hearing in June.

Her stance is reminiscent of how Congress has summoned top tech leaders to lambaste them over privacy practices. Carnival has issued statements saying that environment responsibility is a top priority and there were mischaracterizations to the court.

Why are investors so sanguine? They clearly think Seitz is saber rattling. They realize that barring Carnival ships from U.S. ports would disrupt travel plans for thousands of consumers—hundreds of thousands if the bar lasts very long. Carnival is the world’s largest cruise company and it includes Carnival Cruise Line, Holland America Line, Princess Cruises, Costa and Seabourn.

Investors clearly don’t think Seitz would punish cruise passengers for Carnival’s alleged misbehavior. If they are wrong and Seitz follows through on her threat, expect Carnival shares to take a hit.

 

 

 

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Drew Limsky

Drew Limsky

Editor-in-Chief

BIOGRAPHY

Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.