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NEW RC Shareholders sue RC


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https://uk.mobile.reuters.com/article/amp/idUSL1N2GZ1IZ

 

Even though there is a deadly virus spreading across the world forcing countries to lockdown some people buy shares in a cruise company and then when stock value falls they feel they have the right to sue for not realising, understanding or being given the correct information about how bad this virus is going to be.

Absolute bloody joke !!!!!!

 

 

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So, it seems that the investors bought shares between early February and mid-March, which we barely knew what the damage might be past March. The investors allege that the company, hereinafter RCG, "failed to disclose decreased bookings due to the global pandemic early in the year  and oversold its ability to prevent the spread of the novel coronavirus aboard its ships."

a - Decreased bookings in Feb & March when that is considered the Wave Season which happens to be the "bargain period" for cruises???

b- The "novel coronavirus" is called as such because A “novel” coronavirus (nCoV) is a new strain that has not been previously identified in humans.

c - Oversold it's ability to prevent the spread of the novelcoronavirus aboard its ships??? NOT even WHO, the CDC, and/or any physicians knew what destruction the Novel COVID would have upon the world, needless to say, on a cruise ship. IT'S A NEW VIRUS!!!

d - I note that the Petitioner's are "The City of Riviera Beach General Employees Retirement System" which offers retirement benefits for General employees, Firefighters and Police Officers using three separately administered pension plans are going to fail at this attempt. Since when does a City retirement pension plan can create a class action suit on behalf of Police Officers and Firefighters?? What grounds?? Were these Police Officers and Firefighters damaged in any way in which RCG could be held liable for bringing the COVID virus onboard? If this holds true, the EVERY passenger who gets sick or who has gotten sick onboard for any reason, including but not limited to the Norovirus, can bring suit. This case is meritless and an entity cannot bring suit on behalf of individuals unless they are affected somehow and the only think I can see here is that the City of Riviera Beach is trying to re-fund their sinking pension fund.

FINAL THOUGHT: Why is "The City of Riviera Beach General Employees Retirement System" ONLY going after RCG?? Why not Carnival?? Why not Norwegian?? Why not Bahamas Paradise Cruise Line who leaves/homeports right out of the Port of West Palm Beach? I think it's because of RCG's deep pockets!!

For those who want to read more about the action, you can read the attachment annexed hereto.

 

1318000-1318206-https-ecf-flsd-uscourts-gov-doc1-051122592980.pdf

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1 hour ago, princevaliantus said:

I note that the Petitioner's are "The City of Riviera Beach General Employees Retirement System" which offers retirement benefits for General employees, Firefighters and Police Officers using three separately administered pension plans are going to fail at this attempt. Since when does a City retirement pension plan can create a class action suit on behalf of Police Officers and Firefighters?? What grounds?? Were these Police Officers and Firefighters damaged in any way in which RCG could be held liable for bringing the COVID virus onboard?

What sort of public administration retirement plan oversight committee would allow this kind of a corporate investment anyways?   Where does the fiduciary responsibility of the plan administrator kick in?

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The investor call in February was to review Q4 2019 performance and discuss the future outlook.  It seems to me they were very clear stating they didn't know how this would play out.   

February 4th Earnings Call Transcript:

Richard D. Fain -- Chairman and chief executive officer

  • Thank you, Jason, and good morning, everyone. Obviously, the biggest issue of the day is the Wuhan coronavirus. And as you all know, this virus has infected over 20,000 people in China, and they have taken unprecedented steps to contain it. They've essentially locked down the country and they're acting quickly and aggressively to combat the spread, so have other countries. Unfortunately, no one knows how this outbreak will play out, and we don't know how it will ultimately impact us. So far, we've canceled some sailings, and we've modified some itineraries that extend through March 4. These actions will cost us approximately $0.25 per share. But it seems likely that we will have to cancel more, but we don't yet know how many.
  • We also expect that there will be an impact on future bookings in China especially in the immediate aftermath of the illness. But again we just don't know. One important bright spot is that looking beyond the current outbreak we aren't seeing a big impact on overall bookings elsewhere. But again and here I'm sounding like a broken record, we just don't know. 

Between February 4th and March 23rd the Dow Jones Industrial involving stocks across the spectrum saw a major crash.  Somehow these litigants expected Royal stock to be maintain it's value while virtually every other stock in the world could not. 

Since March 23 Royal stock has trended upward.

What has impacted Royal stock isn't future bookings but governments around the world closing cruise ports and establishing travel bans forcing the cruise lines to cancel cruises and experience no revenue.  Future bookings isn't the problem, not being able to sail is the problem that has impacted Royal as an investment opportunity.  

The second part of the suit claims Royal oversold their ability to prevent spread.

The next investor call was on May 20. 

It seems very clear to me they did oversell the task at hand or take it lightly.  Instead they acknowledged they are still trying to determine how to attempt to operate given the pandemic.

Richard D. Fain -- Chairman and chief executive officer

  • Our goal is to raise our standards to entirely new levels, and we believe that the Healthy Return to Service program will help us get there. We have the time, we have the determination, and we have the expertise. It is tempting to starting talking now about all the individual components of how things will change. However, we're still defining all those enhancements, and we're still taking guidance from our expert advisors. And this process will continue in keeping with our mantra of continuous improvement. We are better prepared today than we were yesterday, and we will be better yet prepared tomorrow, but the one thing that won't change is our determination that we will not start operations until we are fully ready to do so with all the hygiene and other health protocols solidly in place.

The next investor call was on August 10.

Again they didn't appear to oversell the steps that would be required to deal with the virus.  

Richard D. Fain -- Chairman and chief executive officer

  • Against this backdrop, we will not rush to return to service until we are confident that we have figured out the changes that we must make to offer our guests and crew strong health and safety protocols with the enjoyable experience that they rightly expect. We believe that our healthy return-to-service program will help get us there. As I mentioned before, this new program will focus on four key aspects: Upgraded screening of guests and crew prior to boarding, enhanced health processes and protocols on board, a special focus on addressing the destination we visit and lastly, procedures for addressing any reports of exceptions. We recognize that this is extremely complex.

Nothing in these statements suggest it would be easy or they have it all figured out or that they will be able to 100% prevent spread.

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3 hours ago, princevaliantus said:

If this holds true, the EVERY passenger who gets sick or who has gotten sick onboard for any reason, including but not limited to the Norovirus, can bring suit.

In my mind its deeper than that.  Royal hasn't declared bankruptcy, the investors haven't lost their investment.  Should any investor that doesn't get an immediate return file a lawsuit?  What time frame is appropriate for a positive return?  One week?  One month?  One year?  It hasn't been a full year yet.

If they had invested on March 25th they would have tripled their investment now.  Would they still be suing in that case?  How can the company whose stock an investor purchases be responsible for bad timing or bad decision making on the part of the investor?

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I don't know that this lawsuit is a winner, but I think it's more serious than some of the prior posters.  One big tell is that the plaintiffs seem to have a legitimate firm representing them.  This is not some random ambulance chaser in south Florida.  It's a large, NYC-based securities litigation firm.  

Also, the real thrust of the complaint is some fairly rosy comments from early February:

42. During the call, Royal Caribbean’s executives explained that the positive trend in booking came from North America and Europe, where the pandemic was not yet concentrated. Despite significant concerns over COVID-19, CFO Liberty touted “ongoing strength in demand from North America for at least two years and I’m happy to say that there are no signs of a slowdown.” CFO Liberty represented that this purported “strength in demand” was “also benefiting itineraries in Europe.” He also confirmed that, in Europe, “bookings were similar to the same time last year over the past three months and had been up nicely during Wave.”

43. In response to these statements about “non-China booking,” an analyst asked if the Company could “elaborate . . . on that in terms of what [they] have seen with bookings or cancellations in the last week.” Bayley, CEO of Royal Caribbean International, responded: “we’re kind of pleased with what we’re seeing in all of our markets around the world with of course the exception of what's occurring in China.” Despite consumer worries about COVID19, Bayley assured that they had received little concern over the virus from trade partners and customers and that “any issue related to the virus is relatively small.”

(No idea what it's got strike-through like that)

If (big if) RCG already knew about the effects COVID was about have on their business and were downplaying it in that way, they could have some exposure.

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9 hours ago, danv3 said:

If (big if) RCG already knew about the effects COVID was about have on their business and were downplaying it in that way, they could have some exposure

Toilet paper didn't fly off the shelves until the first week of March.  Pretty hard to claim any company should have known better in February when many countries in the world didn't even begin to react or pretend to know until March. 

Heck if I knew now what was held from me by our government then I never would have boarded a cruise ship on March 2 heading to Spain especially given that Spain became a hotspot only after the cruise departed. Should I sue?

Hindsight is always 20-20.  If I knew then what I know now.... I would have made a lot of money in the market and wouldn't think about suing for my massive gains only if I had known.  

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On 10/11/2020 at 12:52 AM, twangster said:

Toilet paper didn't fly off the shelves until the first week of March.  Pretty hard to claim any company should have known better in February when many countries in the world didn't even begin to react or pretend to know until March. 

Heck if I knew now what was held from me by our government then I never would have boarded a cruise ship on March 2 heading to Spain especially given that Spain became a hotspot only after the cruise departed. Should I sue?

Hindsight is always 20-20.  If I knew then what I know now.... I would have made a lot of money in the market and wouldn't think about suing for my massive gains only if I had known.  

Excellent point, my March 15th cruise wasn't even canceled until the day before, the day we landed in the port city.

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On 10/11/2020 at 1:52 AM, twangster said:

Heck if I knew now what was held from me by our government then I never would have boarded a cruise ship on March 2 heading to Spain especially given that Spain became a hotspot only after the cruise departed. Should I sue?

If Royal Caribbean made false statements to you to induce you go on the cruise and you suffered harm as a result, then yeah, you probably should consider suing.  

If there's evidence that bookings weren't as strong as RCG was saying in February, they could have a problem.  Likely, since COVID didn't really blow up until March, the statements in February were true when made, and this lawsuit ends up getting dismissed.  But this is different from just "I'm mad that I lost money in the market!  RCG should have done something!"  The plaintiffs have alleged specific purportedly false statements to the market that would tend to have the effect of propping up the stock price.

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23 minutes ago, danv3 said:

If Royal Caribbean made false statements to you to induce you go on the cruise and you suffered harm as a result, then yeah, you probably should consider suing.  

If there's evidence that bookings weren't as strong as RCG was saying in February, they could have a problem.  Likely, since COVID didn't really blow up until March, the statements in February were true when made, and this lawsuit ends up getting dismissed.  But this is different from just "I'm mad that I lost money in the market!  RCG should have done something!"  The plaintiffs have alleged specific purportedly false statements to the market that would tend to have the effect of propping up the stock price.

It wasn't Royal that misled me in March.  

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16 minutes ago, danv3 said:

The plaintiffs have alleged specific purportedly false statements to the market that would tend to have the effect of propping up the stock price.

The Plaintiffs would need to provide direct quoted false statements to the market made by RCG which manipulated the stock and prove/show that they did, and has been made in their SEC Quarterly filings which would be very hard to do considering these filings are done after the quarter has passed.  A company can release a prospectus which is a formal document that is required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering to the public AND IS NOT A GUARANTEE ON EARNINGS. A prospectus is filed for offerings of stocks, bonds, and mutual funds.

A prospectus looks forward and originally outlined something that doesn't yet exist, describing what it would become. Today the  very prospectus often means a description of a stock offering or mutual fund, whether new or not. I always tell me clients to due their due diligence as the only thing in life that is guaranteed is death!!

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