Royal Caribbean Cruise StockYesterday, Royal Caribbean chairman Richard Fain sold 151,032 shares of his cruise line’s stock for $13,650,151 at an average price of $90.40 a share. President and Chief Operating Officer Adam Goldstein sold 4,184 shares at at $91.08 per share for a total value of $381,094.19. Royal Caribbean’s General Counsel and Chief Compliance Officer Bradley Stein sold 2,402 shares of the company stock for for a total value of $218,748.70.  In sum, these insider traders sold $14,249,993 of company stock.

A little over 10 days earlier Royal Caribbean’s Freedom of the Seas burst into flames as the cruise ship approached Falmouth, Jamaica. The ship burned for one and one-half hours and destroyed all of the insulation around the exhaust stack from the bottom deck to the fifteen deck. Many passengers, crew members and maritime experts believe that the fire may have started due to the installation of a scrubber system on the cruise ship and the welding process to accomplish the work. Royal Caribbean is not saying, of course. 

The cruise lines has also been criticized for downplaying the fire, saying that it was just a "small fire" which was contained in the lower mechanical spaces and it was quickly extinguished, all patently false statements as we have demonstrated in video and photographs. To make matter worse, the cruise ship sailed onto the next port without a post-fire inspection by the flag state (Bahamas) or the classification society. This ship never should have sailed on without a rigorous inspection after the fire. The photographs clearly show that the ship sustained major damage. The photographs and first hand observations by the crew confirm that the fire destroyed the insulation around the exhaust stack and this presented a grave potential danger to the ship’s passengers and crew. 

My opinion is that the Royal Caribbean cruise executives effectively misled the public about the fire in order to maintain the stock’s improved performance. The company shares have rallied 46.38% in the past year. On July 31, 2015, the shares had rallied to one year high of $90.88 compared to a one year low on October 15, 2014 of $52.32.

If the executives had shut the ship down in Jamaica for the mandatory SOLAS inspection, this would have resulted in tens of millions of dollars spent by the company on lodging, airfare of all passengers back to Miami and cruise refunds to over 4,000 people which would have had a material negative effect on the company’s stock.  Did the executives put their financial interests ahead of passenger and Royal Caribbbean Freedom of the Seas Firecrew safety? Absolutely they did, in my opinion. 

What do these executives really think about the stock value now that the fire is out and the cruise line has dodged, so far, a publicity fall-out?  One analyst said that "Mr. Richard’s trade could mean only one (thing): that he’s a pessimist when it comes to the Company’s prospects and its stock price."

Fain & company bamboozled the public with the "small fire" hoax. I suspect that the executives thought that it was time to cash out and put some more millions in their accounts before the truth comes out. 

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Interested in this issue? Read Cruise Executive Richard Fain Hits the Jackpot Again.

Photo Credit: Bottom – Facebook

  • Harold Kurte

    Richard Fain and Adam Goldstein do not believe in telling the truth. They are fantastic spinmeisters who would have you believe the fire on board the Freedom Of The Seas was no big deal at least for these two liars. Yes Fain had a big payday selling stock for well over 13 million dollars yesterday but he and Goldstein have had many a good day and profits from selling stock over the past three years. Bradley Stein is just their head lawyer but a small potato on the totem pole. This just the beginning watch the other insiders and directors selling as much stock as they can. By the way my son and I are stockholders of RCL.

  • Michael Alden

    For those who were there and SAW, first-hand, steel melting from the flames…is there any of the 100-or-so of us on the 12th deck that felt safe sailing on? We didn’t. We were stunned we were allowed to leave Jamaica aboard that ship and it absolutely affected the remainder of our vacation. But what’s our recourse, KNOWING we were in danger — that RC was protecting their ass(es)ets ahead of our — MINE and my WIFE’S — safety? Excuse the pun, but we’ve been burning up over this since we left port in Jamaica. We were trapped, held hostage in a dangerous environment.

  • Kevin

    I do not understand how if someone felt that unsafe sailing on why they would? At some point you are responsible for your own safety. I cruise a lot and if I felt u safe at any given time I would be on the next flight home… I don’t get your comment.

  • Geno

    We hold the stock for the OBC on Celebrity.

  • Douglas Hernandez

    Ships are subject to a fire and any type of emergency. This is why these ships are insured even with the loss of hire and income, therefore I found difficult to believe that there was an association with intent with both issues

  • Sonia

    The wisest course of action would have been to completely disembark the ship of passengers and support staff in Jamaica and come clean with the whole business from the start. The vessel suffered extensive damage by many accounts and should have been withdrawn from service to repair the obvious mechanical, structural, insulative, smoke, water, electrical and plumbing damage from the fire.
    Why on earth this ship wasn’t refitted with the new scrubber system during her extensive drydocking earlier this very year instead of whilst back in service later is perplexing.
    This could have gone terribly wrong and I hope RCL’s ivory tower liars (and all cruise industry spin artists for that matter) learn one of the lessons from this mishap:
    Cutting corners to save a few scheckles may end up costing you several fold more than you would have spent had you done the right thing to begin with.