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RCI bankruptcy possibility - deposits and FCCs

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If Royal Caribbean go bust the ships will still exist and someone would take the business over

 

I could not care less who owned the cruise line as long as they provide a vacation option I want to take

 

 

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6 hours ago, drsel said:

With quantitative easing and a one trillion dollar handout, why is the US$ going up

 

Viewed as a safe haven, world currency always accepted, others perceived as less reliable. Not that it's a great investment itself, but just is more comfortable to some.

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And why is the Great Britain pound falling so fast

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On 3/18/2020 at 11:42 AM, MADflyer said:

The Bank of America analysts have confidence in RCI management, but do feel that this is going to be a long recovery period.

 

By BofA's assessment, demand could take several years to recover. Net yields took three years to return to pre-Sept. 11 levels and about eight years to return to pre-Great Recession levels, he said. 

 

“We believe the net yield recovery could be even longer following this outbreak given its core baby boomer demographic has been most impacted,” Didora said. “While repeat cruisers (~65% of passengers) could return to cruising once the outbreak is over, we see a long tail on regaining the trust of the new-to-cruise customer base.”

 

Royal Caribbean is expected to shoulder a greater burden than its peers, and the analyst said the company should suspend its dividend to ensure liquidity.

Another positive article today....................................

Barrons and Sumzero came out today with a 18 - 24 month price target of $80.00 for RCL.

Why Would Anyone Buy Royal Caribbean Stock? Here’s a Manager’s Bull Case.

Updated March 18, 2020 1:34 pm ET / Original March 18, 2020 1:26 pm ET.

Conclusion

Although the situation surrounding Covid-19 is changing constantly, making it difficult to accurately quantify the impact to RCL, the cruise industry, and the overall economy, it will be temporary. If investors believe the situation is so dire that the company will have to suspend cruises beyond the first half of 2020, then a private-equity buyout or a favorable reorganization is much more likely than Chapter 7. The industry is resilient and has fared through far worse, and RCL’s proven track record is one that can give investors across the capital stack confidence in recovering value after the coronavirus pandemic ends.

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1 hour ago, taglovestocruise said:

Another positive article today....................................

Barrons and Sumzero came out today with a 18 - 24 month price target of $80.00 for RCL.

Why Would Anyone Buy Royal Caribbean Stock? Here’s a Manager’s Bull Case.

Updated March 18, 2020 1:34 pm ET / Original March 18, 2020 1:26 pm ET.

Conclusion

Although the situation surrounding Covid-19 is changing constantly, making it difficult to accurately quantify the impact to RCL, the cruise industry, and the overall economy, it will be temporary. If investors believe the situation is so dire that the company will have to suspend cruises beyond the first half of 2020, then a private-equity buyout or a favorable reorganization is much more likely than Chapter 7. The industry is resilient and has fared through far worse, and RCL’s proven track record is one that can give investors across the capital stack confidence in recovering value after the coronavirus pandemic ends.

What is far worse than being shut down?

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Going bankrupt is the worst case scenario which is unlikely

 

 

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i had my cruise with celebrity cancelled. it was my 35th wedding anniversary cruise where we were taking my entire family children and grandchildren. Celebrity owes me, ready for this, $21078.00 for 12 people and some airfare booked thru Celebrity flights. my fear is i will never see the money. some others in my family booked their air thru CF also. i feel bad for them. money is tight all the way around. i hope we make it.

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On 3/19/2020 at 4:31 AM, compman9 said:

If Royal Caribbean go bust the ships will still exist and someone would take the business over

 

I could not care less who owned the cruise line as long as they provide a vacation option I want to take

 

 

Good way to dump the C&A program or modify. 

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20 minutes ago, Milwaukee Eight said:

Good way to dump the C&A program or modify. 

Not very likely. During the some 3 year recovery phase, RCL has to rely on the bread and butter repeat cruisers. Suite guest cruisers will most likely play a minor roll as the suite prices are not favorable for the "ordinary" suite guest anymore. Everybody has to recover and primarily has to care for his damaged business rather than booking pricey suites.

The C&A members will be the ones that build up RCI again. They will be pampered not the one time suite cruiser. 

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Posted (edited)
15 minutes ago, cgncruiser said:

Not very likely. During the some 3 year recovery phase, RCL has to rely on the bread and butter repeat cruisers. Suite guest cruisers will most likely play a minor roll as the suite prices are not favorable for the "ordinary" suite guest anymore. Everybody has to recover and primarily has to care for his damaged business rather than booking pricey suites.

The C&A members will be the ones that build up RCI again. They will be pampered not the one time suite cruiser. 

The quote I was answering assumed that RCL went out of business and was absorbed by another Group/Owner. 
 

I bet your banking on the CL making a comeback. Lol

Edited by Milwaukee Eight

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On 3/14/2020 at 11:55 PM, awestover89 said:

The article makes a few points that are way questionable; 1), their complete dismissal of a bailout is based on 0 facts, the cruise industry lobby is massive and there are several representatives from both parties who work to help the cruise lines out. So far I've seen 4 members of Congress already talking about how a bailout should be given if needed and only 1 who has said that a bailout should be avoided until the cruise lines make some pro-America changes. Nobody has come out against a bailout yet (of course, that could come once one is actually proposed)

 

2) The "more than half of it's value" that RCCL lost was purely in the stocks, not in actual tangible debt. 

 

3) The article says their debt has skyrocketed, but the document they link to shows a different story. Debt has gone from 12-17B over the past 5 years while the value of their assets have risen from 20-30B. Their assets are growing at double the rate of their debt.

 

All that being said, yes, it's definitely possible that Royal Caribbean will go bankrupt, although I highly doubt it. 

Well I think those assets are primarily ships and do those ships really have much value at the moment?  Assets only have true value if there is a market for them. Hypothetical, if RCL were to put all of the oasis class ships on the market right now would there be any buyer will to pay even half what they are listed for on the RCL financial statement?

 

tangible items are only worth what someone else will pay for them at a particular point in time not what anyone’s financial statement values them at. 
RCL’S losses are very really as all of their tangible assets have suffered a massive loss in value. Plus they have virtually no liquidity as their recent credit acquisitions prove. In the next thirty to sixty days where will more credit come from?

 

 

 

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1 hour ago, Milwaukee Eight said:

Good way to dump the C&A program or modify. 

Start again. Wonder how many would still be loyal. Might be an under 70 C&A benefit scheme

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3 hours ago, drewski1 said:

i had my cruise with celebrity cancelled. it was my 35th wedding anniversary cruise where we were taking my entire family children and grandchildren. Celebrity owes me, ready for this, $21078.00 for 12 people and some airfare booked thru Celebrity flights. my fear is i will never see the money. some others in my family booked their air thru CF also. i feel bad for them. money is tight all the way around. i hope we make it.

You can always attach and put a claim on RCL's assets and you may be one of the many owning ships.😁

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I believe Carnival raised enough cash to go right through the rest of 2020 shutdown. My guess is Royal has done the same. My guess is slow startup in June though.

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8 minutes ago, JAMESCC said:

I believe Carnival raised enough cash to go right through the rest of 2020 shutdown. My guess is Royal has done the same. My guess is slow startup in June though.

 

JAMESCC...truly hoping you're right about June.

We have sailings out of Bayonne...will EWR even be open?...sigh.

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4 minutes ago, bonsai3s said:

 

JAMESCC...truly hoping you're right about June.

We have sailings out of Bayonne...will EWR even be open?...sigh.

Me too, I just like saying it because it makes me feel better. When is your cruise? Ours in Sept 6, moved from May 10.

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6 minutes ago, JAMESCC said:

Me too, I just like saying it because it makes me feel better. When is your cruise? Ours in Sept 6, moved from May 10.st

 

We were supposed to start TODAY...on the Adventure.  B6B, Fort Lauderdale roundtrips then to Bayonne ending May 15th.  These were ALL cancelled by RCCL.

 

We booked another B6B on the Adventure...starting May 15th and ending June 26th.  All from Bayonne.  We have to fly to EWR.  Note: RCCL already gave us the option to cancel on the first two sailings...so hoping you're right and we can still sail in June.......bigger sigh.

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Just now, bonsai3s said:

 

We were supposed to start TODAY...on the Adventure.  B6B, Fort Lauderdale roundtrips then to Bayonne ending May 15th.  These were ALL cancelled by RCCL.

 

We booked another B6B on the Adventure...starting May 15th and ending June 26th.  All from Bayonne.  We have to fly to EWR.  Note: RCCL already gave us the option to cancel on the first two sailings...so hoping you're right and we can still sail in June.......bigger sigh.

Ouch that is a little close. Good luck. I think cruises start up in June personally. 

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On 3/19/2020 at 4:04 PM, taglovestocruise said:

Another positive article today....................................

Barrons and Sumzero came out today with a 18 - 24 month price target of $80.00 for RCL.

Why Would Anyone Buy Royal Caribbean Stock? Here’s a Manager’s Bull Case.

Updated March 18, 2020 1:34 pm ET / Original March 18, 2020 1:26 pm ET.

Conclusion

Although the situation surrounding Covid-19 is changing constantly, making it difficult to accurately quantify the impact to RCL, the cruise industry, and the overall economy, it will be temporary. If investors believe the situation is so dire that the company will have to suspend cruises beyond the first half of 2020, then a private-equity buyout or a favorable reorganization is much more likely than Chapter 7. The industry is resilient and has fared through far worse, and RCL’s proven track record is one that can give investors across the capital stack confidence in recovering value after the coronavirus pandemic ends.

RCL will survive in some form.  The form is the question.

 

 What happens to common stockholders current positions.  One thought is anyone putting cash into company would do it through Preferred stock with a dividend and a number of other priority rights, including conversion rights, tag along, put, etc.  What would the potential dilution of so many more common shares do the the price of the stock?

 

They just secured lines of credit.  I am sure those lines were designed knowing there is a chance of default and thus some protection?

 

How do they take care of senior management.  They still need them going forward, or if not them who?

 

Last on the totem pole of preferences is the common stock holder.  A price target of 80 in 18-24 months is a crap shoot.

 

I am also concerned that the 'cash' burn is too high and to my knowledge they have not pulled back the dividend as Carnival has already done.  When that happens, which it should happen soon, some investors looking for the high yield will depart and create downward pressure on the stock.  Just as a point of reference, RCL stock in 2009 got down to around 6. It will be interesting to see it play out as everyone has a share price they think is worth the risk/reward.  Mine is.......

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6 hours ago, bigeck said:

Start again. Wonder how many would still be loyal. Might be an under 70 C&A benefit scheme

I quoted a post that said a new owner would run Royal. People really believe they are the life and death of Royal. Maybe they start their own program. 

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26 minutes ago, Milwaukee Eight said:

I quoted a post that said a new owner would run Royal. People really believe they are the life and death of Royal. Maybe they start their own program. 

A lot of them think they own the cruise line and the C&A program.

That's why I have an avoid list

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Some solace, got my dividends yesterday.  Doesn't make up for the losses.😌

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6 minutes ago, nelblu said:

Some solace, got my dividends yesterday.  Doesn't make up for the losses.😌

Yep, these people saying they don't care if rcl goes under probably don't currently own stock.

 

Of course I care my stock is down. 

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1 hour ago, firefly333 said:

Yep, these people saying they don't care if rcl goes under probably don't currently own stock.

 

Of course I care my stock is down. 

Who doesn't care if RCI goes under? I care stock or no stock. I like the product and would be unhappy to lose it.

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9 minutes ago, Ocean Boy said:

Who doesn't care if RCI goes under? I care stock or no stock. I like the product and would be unhappy to lose it.

Hi,

Most of the people that are waiting (and waiting) for a refund don't want RCL to

go bankrupt. No RCL, no refunds. It's bad enough for all your other stocks going

down but RCL stalling and giving excuses not to refund adds to the stress level

of most. They are stalling refunds to stay alive (pay bills & themselves) and maybe

prevent an early bankruptcy. My opinion, but hopefully I may get a refund and

then may not be so grumpy.

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