Cruise Stocks Sink After Lutnick Remarks

Stocks in major cruise lines sank on Thursday after remarks from newly confirmed Commerce Secretary Howard Lutnick about cracking down on how the industry is taxed. In a Fox News appearance Wednesday night, Lutnick suggested that the companies would be paying more taxes under the Trump administration, CNBC reports. "You ever see a cruise ship with an American flag on the back? They have flags of like, Liberia or Panama," Lutnick said. "None of them pay taxes," he said. "This is going to end under Donald Trump."

Royal Caribbean and Norwegian Cruise Line both fell more than 10% Thursday morning, though they recovered slightly later in the day. Both companies are based in Miami, but Royal Caribbean is incorporated in Liberia and Norwegian is incorporated in Bermuda, Quartz reports.

Analysts at Stifel Financial called the sell-off a "massive overreaction," noting that politicians often talk about changing the industry's tax structure without taking action, CNBC reports. From a tax standpoint, "the cruise industry is embedded under the cargo industry in the eyes of the Internal Revenue Service," Stifel analysts said. "That would mean the entire cargo industry would have to be turned upside down even before they got to the cruise industry, which is a sliver of the size of the cargo industry." (More cruise lines stories.)