Ask Matt: Can SeaWorld stop the bleeding?

Q: Can SeaWorld stop the bleeding? 

A: SeaWorld (SEAS) is going to end its iconic killer-whale shows. Investors hope the change will end the pain in their portfolios.

Shares of SeaWorld have dropped 46% since selling shares to the public for the first time in April 2013. The stock has been in free fall ever since the documentary "Blackfish" gained greater attention after debuting at the 2013 Sundance Film Festival. The film stoked public concern over the safety of the killer-whale animal shows. Shares of SeaWorld are up $1.14, or 6.7%, to $18.25 following the announcement of the company's decision to phase out the shows.

The powerful public backlash against SeaWorld was especially costly for the company due to the fact it carries a heavy load of debt. The company ended 2015 with nearly $1.6 billion in long-term debt - which is four times higher than the equity shareholders have invested in the business, says S&P Global Market Intelligence. Compare that with Walt Disney (DIS) which carries less debt than it has equity. Given SeaWorld's heavy leverage, even gradual drops in revenue and profit can have a chilling effect over time. Revenue dropped 0.5% in 2015 after falling nearly 6% in 2014. Net income has fallen three years in a row and profit is a third of what it was in 2012.

The company says revenue and attendance will increase. Analysts agree. Adjusted profit is expected to rise 4% in 2016 and revenue increase 1.9%. Analysts think the stock will be worth $21.55 a share in 18 months, a 18% increase.

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.