Explain the Princess Stock Tanking

[Roberto256]

I thought this was an interesting artical about CCL:

 

https://seekingalpha.com/article/4515978-carnival-enormous-risk-for-lt-common-stockholders

 

I thought I was safe with my 100 shares being bought at $8.

But, maybe not...

[rj59]

Nobody can predict the stock market or forecast the future of any stock. If you're investing in Carnival to make a long-term profit, then you are taking too much risk and should just invest in mutual funds. If you bought it for the high 10% dividend before shutdown, as I did, then you also made a mistake, since they stopped paying dividends. If you go on cruises just to get a shareholder OBC, then you're also not making a rational financial decision. I view it as a nice bonus, like the military OBC, but I realize the more important financial aspects are getting a good cruise deal, not spending money on board on gambling, photos, shopping, or other things that don't add value to my life, and most importantly, enjoying the Princess experience, the crew and fellow passengers, the ports, and the beauty of the sea. I felt that acutely last week on the Carnival Spirit, where I got a $90 6-nt cruise, plus the shareholder OBC, but when I passed a Princess ship on the sea and saw the Royal in port, I realized I would have been much happier on Princess and that I should have waited for the good solo Alaska rates for June. 

[chisoxfan]

On 6/2/2022 at 3:06 PM, rj59 said:

Nobody can predict the stock market or forecast the future of any stock. If you're investing in Carnival to make a long-term profit, then you are taking too much risk and should just invest in mutual funds. If you bought it for the high 10% dividend before shutdown, as I did, then you also made a mistake, since they stopped paying dividends. If you go on cruises just to get a shareholder OBC, then you're also not making a rational financial decision. I view it as a nice bonus, like the military OBC, but I realize the more important financial aspects are getting a good cruise deal, not spending money on board on gambling, photos, shopping, or other things that don't add value to my life, and most importantly, enjoying the Princess experience, the crew and fellow passengers, the ports, and the beauty of the sea. I felt that acutely last week on the Carnival Spirit, where I got a $90 6-nt cruise, plus the shareholder OBC, but when I passed a Princess ship on the sea and saw the Royal in port, I realized I would have been much happier on Princess and that I should have waited for the good solo Alaska rates for June. 

Have to disagree with you.... Paul Pelosi and Jerome Powell have been very astute with their stock picks 🙃

Maybe I am missing something but there appears to be no requirement regarding the time period to hold CCL to qualify for OBC. So while buying and holding  CCL just for a credit is likely fraught with uncertainty one could easily and cheaply buy and sell to prove holding and apply for credit. I know this is not what CCL is trying to promote with the shareholder credit but I do not see where this

would not work. JMHO

 

[Honolulu Blue]

4 hours ago, chisoxfan said:

Maybe I am missing something but there appears to be no requirement regarding the time period to hold CCL to qualify for OBC. So while buying and holding  CCL just for a credit is likely fraught with uncertainty one could easily and cheaply buy and sell to prove holding and apply for credit. I know this is not what CCL is trying to promote with the shareholder credit but I do not see where this would not work. JMHO

You're not missing anything.  There's no particular holding period required for the shareholder OBC.  There are a couple of minor gotchas about doing this:

 

1.  There's no guarantee about the price you get when you sell your stock.  You can lose real $$$ doing this if the price falls far enough, fast enough.

2.  If you want more OBC for another cruise that you book later, you'll have to buy the stock again.

[PescadoAmarillo]

We have bought and sold several times to take advantage of capital losses or gains for tax purposes and to lock in the OBC for as many as ten plus cruises at a time. 

[Doug R.]

On 5/26/2022 at 9:34 PM, cruzsnooze said:

If the company is having as much difficulty as people state and the stock price reflects that opinion maybe cruising will get smaller and back to being for the wealthier passengers. I hope for the syake of CCL they can maintain their stock prices until they become more profitable. In hindsight they grew too big and too fast.

 

Edited June 5, 2022 by Doug R.

[Astro Flyer]

On 6/2/2022 at 9:45 AM, Roberto256 said:

I thought this was an interesting artical about CCL:

 

https://seekingalpha.com/article/4515978-carnival-enormous-risk-for-lt-common-stockholders

 

I thought I was safe with my 100 shares being bought at $8.

But, maybe not...

Thanks…this reaffirms my concern about the amount of debt CCL has accumulated.

[chisoxfan]

3 hours ago, Honolulu Blue said:

You're not missing anything.  There's no particular holding period required for the shareholder OBC.  There are a couple of minor gotchas about doing this:

 

1.  There's no guarantee about the price you get when you sell your stock.  You can lose real $$$ doing this if the price falls far enough, fast enough.

2.  If you want more OBC for another cruise that you book later, you'll have to buy the stock again.

Yes, I agree. Bought and sold within an hour and gained a few  (12 )dollars. 

Only messed with this since our cruise was longer and 250 OBC offered. Probably would not do this for the shorter cruise credit (100).

[cruzsnooze]

Seems the stock continues to decline due to heavy debt.

[wowzz]

17 minutes ago, cruzsnooze said:

Seems the stock continues to decline due to heavy debt.

The debt is not the problem,  the issue is generating enough profit to service the interest costs. 

From a personal point of view,  I can get a loan at 2.8%.  With inflation at 10%,  it makes sense to borrow money to buy tangible assets, as long as I can repay the loan plus interest.

Carnival's problem is that they have borowed at 10%, and can't generate enough cashflow to keep the business running, and service the debt.

Edited June 12, 2022 by wowzz