LOS ANGELES — Shares of SeaWorld Entertainment Inc. dropped a day after a state agency approved an expansion plan for the San Diego park’s killer whale tanks but with conditions that would bar captive orca breeding and limit the transfer of whales in and out of the park.
On Friday, the company’s stock dropped $1.13, or 5.91 percent, to $17.99 in early trading.
“This is bad news,” said James Hardiman, equity research analyst and managing director at Wedbush Securities. “A much better result for SeaWorld would have been if the Coastal Commission had denied their request.” The California Coastal Commission has authority over construction along the state’s shoreline.
SeaWorld described its $100 million expansion plan as a way to improve the whales’ habitat and increase research opportunities. The Blue World Project intended to replace an existing 1.7-million-gallon holding facility with a new 450,000-gallon pool and a 5.2-million-gallon tank.
Now, with conditions set on the project’s approval, moving forward essentially would signal the end of the park’s orca program. But not going through with the project would increase the negative publicity the company has faced since the 2013 release of the documentary “Blackfish,” which accused the park of mistreating its whales.
The criticism has taken a toll on the company’s finances. In August, SeaWorld reported a slight drop in attendance and revenue in its quarterly report. In addition to bad weather at SeaWorld San Antonio and a shift in the timing of Easter, the company also blamed the decline in attendance on the ongoing criticism by animal rights groups.
The Coastal Commission’s vote on Thursday was no exception, as testimony stretched on for more than eight hours. Both SeaWorld and People for the Ethical Treatment of Animals brought in hundreds of supporters.
In a statement, SeaWorld Chief Executive Joel Manby said the company was disappointed with the conditions placed on the project’s approval and would review its options.
“Depriving these social animals of the natural and fundamental right to reproduce is inhumane, and we do not support this condition,” he said.