Carnival Corporation halts stock dividends

[Steve Q]

https://www.marketwatch.com/story/carnival-to-suspend-dividend-and-stock-buybacks-expects-to-remain-in-compliance-with-debt-covenants-2020-03-31?mod=home-page

[N7786W Flyer]

LOL...you just beat me to posting this...

[13cheermom]

This is not good . . . .  Stockholder OBC just went bye-bye 🤣

[bury me at sea]

Suspending dividends and buybacks was the responsible thing to do.

[FSHLOT]

Maybe the responsible thing to do, but still not good!!

[pe4all]

And I bought 100 shares last week!  Luckily I got a great price at the time.

[thatoneguyyouknow]

If you didn't see this coming you shouldn't be buying individual stocks. 

[Honolulu Blue]

2 hours ago, Steve Q said:

https://www.marketwatch.com/story/carnival-to-suspend-dividend-and-stock-buybacks-expects-to-remain-in-compliance-with-debt-covenants-2020-03-31?mod=home-page

 

I saw this one coming from approximately 10 miles away.  I'm only shocked that anyone else didn't see the same thing coming.

 

2 hours ago, 13cheermom said:

This is not good . . . .  Stockholder OBC just went bye-bye 🤣

 

The article doesn't mention that, and I frankly think they won't touch it.  Compared to a real dividend, the shareholder OBC costs them relatively little.

[Wanna_Cruize]

I could possibly see them upping the number of required shares for the OBC. Glad I bought 200 of them instead of 100 when it went below $8

[Honolulu Blue]

2 minutes ago, Wanna_Cruize said:

I could possibly see them upping the number of required shares for the OBC. Glad I bought 200 of them instead of 100 when it went below $8

 

I could see them doing this, yes.  They could also do a reverse split, which would have the same effect.  But I don't see either as being more likely than them leaving things alone.

[skiorcruise]

Bummer.

 

Not that I depended on the dividend, but it was an addition to my income stream.

 

[naxer]

I apologize.  I'm afraid this is my fault.  They finally figured out I own stock in the company.  You see, whenever I buy stock in a company with a decent dividend, they end up suspending it.  

[jimbo5544]

On 3/31/2020 at 7:18 AM, 13cheermom said:

This is not good . . . .  Stockholder OBC just went bye-bye 🤣

Actually is the best thing they could do.  

[PhillyFan33579]

On 3/31/2020 at 9:53 AM, Honolulu Blue said:

 

I saw this one coming from approximately 10 miles away.  I'm only shocked that anyone else didn't see the same thing coming.

 

 

The article doesn't mention that, and I frankly think they won't touch it.  Compared to a real dividend, the shareholder OBC costs them relatively little.

I would be very surprised if Carnival continued providing OBC to shareholders. Long time shareholders who bought the stock at significantly higher prices than Carnival stock is currently selling for would not be happy to see Carnival providing OBC while their stock worth has decreased substantially. 

[ontheweb]

3 hours ago, PhillyFan33579 said:

I would be very surprised if Carnival continued providing OBC to shareholders. Long time shareholders who bought the stock at significantly higher prices than Carnival stock is currently selling for would not be happy to see Carnival providing OBC while their stock worth has decreased substantially. 

The OBC costs them relatively nothing, and at the same time provides an incentive to book cruises owned by CCL. They are going to need every incentive available once cruising returns.

[PhillyFan33579]

15 minutes ago, ontheweb said:

The OBC costs them relatively nothing, and at the same time provides an incentive to book cruises owned by CCL. They are going to need every incentive available once cruising returns.

To know how much this program costs Carnival, you would have to know how many passengers take advantage of this incentive. Obviously Carnival knows the answer, but based on posts I read online here and other sites along with friends I know who cruise frequently and always use the stockholder OBC, my guess is this costs Carnival more than “relatively nothing”.  Every time they issue an OBC for $100 based on a 7 day cruise for example, that is $100 less revenue for Carnival. Multiply that by the number of passengers using this incentive and there is no doubt in my mind it cost more than “relatively nothing”.  

[fla gang]

I was going to purchase Carnival and Royal but I just don't have a good feeling about either company surviving. No idea how long this will last nor how long these islands will stay off limits to cruise ships!  

[ontheweb]

4 hours ago, PhillyFan33579 said:

To know how much this program costs Carnival, you would have to know how many passengers take advantage of this incentive. Obviously Carnival knows the answer, but based on posts I read online here and other sites along with friends I know who cruise frequently and always use the stockholder OBC, my guess is this costs Carnival more than “relatively nothing”.  Every time they issue an OBC for $100 based on a 7 day cruise for example, that is $100 less revenue for Carnival. Multiply that by the number of passengers using this incentive and there is no doubt in my mind it cost more than “relatively nothing”.  

You have to balance the cost against the gains to figure out how much it costs Carnival  Corporation, or even if it is a gain for them instead of a cost. How many opt for a cruise with the OBC in mind? Since they seem to automatically renew this every year, you have to feel that they feel that there is a net gain.

[PhillyFan33579]

1 hour ago, ontheweb said:

You have to balance the cost against the gains to figure out how much it costs Carnival  Corporation, or even if it is a gain for them instead of a cost. How many opt for a cruise with the OBC in mind? Since they seem to automatically renew this every year, you have to feel that they feel that there is a net gain.

I understand your point, but keep in mind they renewed the OBC benefit every year in a pre-COVID-19 world. Obviously time will tell if they decide to renew this benefit later this year.  My guess is they won’t, but I also think Carnival won’t be cruising any time soon, which is directly related in my opinion. 

[coevan]

10 minutes ago, PhillyFan33579 said:

I understand your point, but keep in mind they renewed the OBC benefit every year in a pre-COVID-19 world. Obviously time will tell if they decide to renew this benefit later this year.  My guess is they won’t, but I also think Carnival won’t be cruising any time soon, which is directly related in my opinion. 

 

 

I completely agree, no way are they to give a $100 for an $800 stock purchase, that's 12.5%. I believe their share holders meeting is in July. I would be willing to bet they put this to bed for at least a year. 

[ontheweb]

16 minutes ago, PhillyFan33579 said:

I understand your point, but keep in mind they renewed the OBC benefit every year in a pre-COVID-19 world. Obviously time will tell if they decide to renew this benefit later this year.  My guess is they won’t, but I also think Carnival won’t be cruising any time soon, which is directly related in my opinion. 

One of us is right, the other will be proven wrong. Time will tell, and we'll see whose analysis is the one that they use.

[ontheweb]

12 hours ago, coevan said:

 

 

I completely agree, no way are they to give a $100 for an $800 stock purchase, that's 12.5%. I believe their share holders meeting is in July. I would be willing to bet they put this to bed for at least a year. 

They are giving the $100 for the purchase of the cruise, not for the $800 value of the stock.

[Steve Q]

Below is a link to the latest article regarding the solvency issue. While it specifically addresses the issue with Carnival, Norwegian and Royal are mentioned.

I also thought it was interesting to note that one analyst stated that it could be up to a year for things to return to normal. Also, the cruise lines are planning to significantly reduce fares. Those that believe there is going to be a rush to book cruises might be mistaken.
 

https://www.cnbc.com/2020/04/05/carnivals-struggle-to-survive-the-coronavirus-as-outbreak-wipes-out-the-cruise-industry.html

 

[jimbo5544]

5 minutes ago, Steve Q said:

Below is a link to the latest article regarding the solvency issue. While it specifically addresses the issue with Carnival, Norwegian and Royal are mentioned.

I also thought it was interesting to note that one analyst stated that it could be up to a year for things to return to normal. Also, the cruise lines are planning to significantly reduce fares. Those that believe there is going to be a rush to book cruises might be mistaken.
 

https://www.cnbc.com/2020/04/05/carnivals-struggle-to-survive-the-coronavirus-as-outbreak-wipes-out-the-cruise-industry.html

 

The headline alone is enough to make me not read it, but I did.  The only cruising disaster they did not bring up was the Titanic....

[Illbcruzn4life]

The headline alone is enough to make me not read it, but I did.  The only cruising disaster they did not bring up was the Titanic....

They only mentioned mishaps with Carnival Corp ships.



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