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SeaWorld's Black Eye: Earnings In The Wake Of 'Blackfish'

Top Hats profile picture
Top Hats


  • SEA's Blackfish fiasco is increasingly likely to affect the year's earnings and outlook and may present an excellent short opportunity.
  • Brought public in a leveraged buyout and massively indebted, SEAS is grossly overvalued for a company of its maturity and compared to peers with less forward looking risks.
  • Blackstone and company insiders will continue to head for the exits ahead of 2014's Q2 and Q3 earnings results.

Sea World Inc. (NYSE:SEAS) has had its share of headaches since their public offering last spring. News seems to pour in by the hour and has accelerated exponentially since the media outlet behemoths CNN and Netflix (NFLX) began airing the controversial documentary 'Blackfish'.

The slant of the film has been questioned considerably and SeaWorld has gone to great lengths to discredit it. Nonetheless, the company has found itself in hot, shark-filled waters and its ability to divert investors' attention from the circling fins will continue to diminish.

The extremes that SEAS willingly goes to increasingly grow suspect and the language and tone of the recent Q4 call should be closely scrutinized to assess the management's fear or confidence in what future material effects may be.

Being that SEAS popped +8.4% the day the film wasn't nominated for an Oscar and more recently, slumped -5.4% when a California lawmaker proposed a bill banning the use of Orca Whales for entertainment, we have had several indications of Wall Street's weighting in regard to potential implications from the film's mass distribution and the public's reactions.

My comments here will not shed much further light on the material of the documentary or make assumptions toward the ethical treatment of marine animals by SeaWorld. If you're interested, trust me, it's a very interesting topic to skim through via your favorite search engine.

By pointing out some of SeaWorld's PR nightmares, blunders, and misbehavior, and by delving into SEAS's capital structure and business risks, I'd like to describe to you why I feel SEAS's '14 earnings will make a great candidate to short while Blackfish remains an active dialogue in the collective American Psyche.

The Conference Call

I feel that although SEAS has already stated a record Q4 attendance number (note: busiest/critical Qs are Q2 & Q3) and full-year '13 at a

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Comments (6)

Top Hats profile picture
Huge drop after the #'s. Congrats to all who took this trade!
Top Hats profile picture
Looking weak going into the Q2 call
Nicholas Pardini profile picture
I agree with the premise of this article and am currently shorting SEAS. I wrote an expose on the company for my subscribers in the link below.

machiavelli profile picture
Nice! I won't be shorting SEA but I'll cheer its demise and help you celebrate.
Top Hats profile picture

Thanks for your comments. I also think people will think differently towards SEAS, they already are! Their sudden plans to expand overseas won't offset anything with the majority of their business in the States.
Good article…when are people going to wake up. Watch Blackfish or The Cove, this is barbaric and we will see the end of these parks in our life time, unfortunately not soon enough.

I live in Victoria, As a child I remember going to the local Orca marine park, but it did not take long to realize that this was complete cruelty. This park closed over 20 years ago, as shown in Black Fish. Here in the Pacific North West we have the opportunity to see these majestic creatures in their natural environment. It is absolute insanity that that we still think it is ok to keep these creatures in captivity. If you want to see whales, take a trip or watch one of many amazing nature DVDs.

People have no idea how many marine animals have been tortured or killed for our entertainment, and Sea World is the industry leader.

Anyone that owns shares in this business should rethink their investment choices, at least big tobacco is selling to willing participants these highly intelligent creatures have no choice. I will short this stock until it is gone.
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