SeaWorld Entertainment today (December 11) ousted its president and chief executive officer, Jim Atchison, who will become vice chairman of the problem-plagued company. Chairman David D'Alessandro will be interim chief executive. The stock rose 2.88 percent to $16.09 on the day.
SeaWorld is cutting $50 million of its costs, and will make layoffs that haven't been revealed. SeaWorld's revenue, attendance, and earnings have been hit, partly by the widespread viewing of the documentary Blackfish, which exposed the risks — including deaths of trainers— of keeping killer whales in captivity. Initially, its executives wouldn't go on camera to denounce the film. Then the company blasted the movie and launched an expensive public relations campaign that didn't seem to quell the criticism.
The stark decline in the company's stock is in large part a result of it being extremely overpriced from the beginning. It went public in April of last year at $27, shooting almost to $34 the first day of trading. But the company was (and still is) laden with debt. No proceeds of the offering went to SeaWorld. Wall Street's Blackstone Group had bought the company in 2009 and loaded it with debt for the purchase. Proceeds of the offering went to pay back Blackstone and other investors for their initial investment, which they made through Cayman Islands entities. At its offering price, SeaWorld sold for 27 times earnings while competitor Six Flags sold for 12.1 times earnings and Disney for 19. At the time, I said the offering "shines and stinks lack a mackerel in the moonlight," but I was red-faced for many months until reality set in.