CCL offers another 1 Billion in common stock :(

[BermudaBound2014]

As mentioned, with this debt load  (35 Billion) further dilution was inevitable. Stock dropped 10% after hours. Things are extremely bleak for CCL at this time. The balance sheet is entirely upside down. I do not see how reorganization can be avoided.

 

Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK), today announced that Carnival Corporation (the "Company") has commenced an underwritten public offering of $1,000,000,000 of shares of common stock of the Company. The Company intends to grant the underwriter a 30-day option to purchase up to $150,000,000 of additional shares of common stock of the Company. The Company expects to use the net proceeds from the offering for general corporate purposes, which could include addressing 2023 debt maturities.

Read more at: https://www.lelezard.com/en/news-20486138.html

Edited July 21, 2022 by BermudaBound2014

[LMaxwell]

I honestly thought it would be around $6 by now; $10 seems strong in contrast. 

 

As far as reorg talk; have they breached any covenants that would require that process to start? It seems like the creditors are mostly playing along with the house of cards as if one loses they all stand to lose. 

[BermudaBound2014]

12 minutes ago, LMaxwell said:

I honestly thought it would be around $6 by now; $10 seems strong in contrast. 

 

As far as reorg talk; have they breached any covenants that would require that process to start? It seems like the creditors are mostly playing along with the house of cards as if one loses they all stand to lose. 

You nailed it- one big house of cards. 
 

gotta give them credit for still being able to raise money. 

Edited July 21, 2022 by BermudaBound2014

[Boatdrill]

Does anyone have any concern about booking a future cruise on HAL, and not being able to get your deposit back ?

[LMaxwell]

49 minutes ago, Boatdrill said:

Does anyone have any concern about booking a future cruise on HAL, and not being able to get your deposit back ?

When selecting a travel insurance plan you'll want to look for one that covers you for bankruptcy, financial default or financial insolvency of the tour operator (cruise line, hotel, airline, etc.)

 

[zgscl]

1 hour ago, Boatdrill said:

Does anyone have any concern about booking a future cruise on HAL, and not being able to get your deposit back ?

I do not because I always buy travel insurance or have an annual policy that covers bankruptcy, etc. as LMaxwell mentioned. I do not think CCL will close, if anything HAL will get sold off, and with any luck it will be to someone who will put some new investment into their onboard entertainment. 

[DaveOKC]

Smart move IMO.  Better to issue stock (especially after recent runup) than to borrow more money at high (12%) rates.  Less pressure on the business as less interest to pay out every quarter.

 

[BermudaBound2014]

7 hours ago, LMaxwell said:

When selecting a travel insurance plan you'll want to look for one that covers you for bankruptcy, financial default or financial insolvency of the tour operator (cruise line, hotel, airline, etc.)

 

 

Which is why I never advise to purchase insurance directly from the cruise line. If you read their fine print, financial insolvency is often excluded. Note: I haven't read HALs policy specifically but I still wouldn't purchase it because, if anything, it presents a conflict of interest.

 

Your CC could protect you under the Consumer Protection Act, but there are lots of niggles there too and some have specifically excluded financial insolvency in the travel industry (I believe Chase Sapphire has excluded but it's been awhile since I checked so don't hold me to that). Bottom line, read all policies very carefully. There are ways to protect yourself should you feel that is necessary.

 

 

[iancal]

Understand the terms or your credit card agreement as they pertain to challenges/ charge reversals..  Particularly the maximum number of days between the charge and the challenge for non delivery.   

 

Never, ever pay for a cruise with cash/debit.  Don't pay more than 540 days or so in advance...the limit of most issuers credit card protection.

 

Once you have accepted an FCC offer your credit card protection ends.  

 

If your cruise is cancelled by the cruise line insist on a cash refund.  If you have not rec'd the refund in 60 days initiate a credit card challenge.

Edited July 21, 2022 by iancal

[ChinaShrek]

16 minutes ago, iancal said:

Understand the terms or your credit card agreement as they pertain to challenges/ charge reversals..  Particularly the maximum number of days between the charge and the challenge for non delivery.   

 

Never, ever pay for a cruise with cash/debit.  Don't pay more than 540 days or so in advance...the limit of most issuers credit card protection.

 

Once you have accepted an FCC offer your credit card protection ends.  

 

If your cruise is cancelled by the cruise line insist on a cash refund.  If you have not rec'd the refund in 60 days initiate a credit card challenge.

What about buying and using gift cards to pay off a cruise? Save 10% right but maybe I would lose all my money!

[NavyCruiser]

So if I buy 100 shares of Carnival stock, for less than $1000 today, I can then apply the shareholder $100 off (OBC?) on our next HAL cruise 2 months from now?

Thanks,

[DaveOKC]

11 minutes ago, NavyCruiser said:

So if I buy 100 shares of Carnival stock, for less than $1000 today, I can then apply the shareholder $100 off (OBC?) on our next HAL cruise 2 months from now?

Thanks,

Yep - for a 7 day cruise.  Longer cruises (14 day) is $250 - almost pays for the stock!

[willoL]

30 minutes ago, NavyCruiser said:

So if I buy 100 shares of Carnival stock, for less than $1000 today, I can then apply the shareholder $100 off (OBC?) on our next HAL cruise 2 months from now?

Yes, I can confirm this because I bought 100 shares of CCL when it dipped below $10/share in June and today $250 OBC showing for each of my two HAL cruise staterooms departing 8/3/2022. (One joint shareholder booked in each cabin.)

 

The cruise was booked before I bought the stock; my TA got the OBC applied on my behalf.

[LMaxwell]

3 hours ago, BermudaBound2014 said:

 

Which is why I never advise to purchase insurance directly from the cruise line. If you read their fine print, financial insolvency is often excluded. Note: I haven't read HALs policy specifically but I still wouldn't purchase it because, if anything, it presents a conflict of interest.

 

I was going to mention as much in my prior post but I figured I'd immediately draw out someone with an opposite experience so simplified the advice as to what to look for.  You are correct, buying insurance from the travel vendor typically will not include this form of coverage. 

[LMaxwell]

37 minutes ago, NavyCruiser said:

So if I buy 100 shares of Carnival stock, for less than $1000 today, I can then apply the shareholder $100 off (OBC?) on our next HAL cruise 2 months from now?

Thanks,

 

*IF* you feel like buying OBC for stock, and this is not financial advice, consider buying 2-3X as much as is required. If you truly feel it is good value and will recover, then your gains will be locked in to 100 shares that you may want to continue to hold if you are a frequent cruiser.  If you have 300 shares and prices rise sufficiently, you can shed off shares to recoup your total investment and still keep the 100 shares forever, not really caring about the price, since it had been paid for and is generating OBC.  

 

I am in no rush to buy CCL stock, but if I were it would be more than the minimum to get a perk.  I want profits and perks. Good luck in your research and selections! 

[iancal]

You might want to wait until after the next share issuance or after CCL has floated the next set of bonds before buying more shares than you require to get the stock credit.

 

I believe there will be  more of both.

Edited July 21, 2022 by iancal

[BermudaBound2014]

22 minutes ago, LMaxwell said:

I was going to mention as much in my prior post but I figured I'd immediately draw out someone with an opposite experience so simplified the advice as to what to look for.  You are correct, buying insurance from the travel vendor typically will not include this form of coverage. 

Lol- smart. You know me, I just jump right in with reckless abandonment 🙂 

[Gail & Marty sailing away]

12 hours ago, Boatdrill said:

Does anyone have any concern about booking a future cruise on HAL, and not being able to get your deposit back ?

18 cruises Booked as of today .

[LocoLoco1]

Being broke has consequences. I have a ‘Freebie’ Casino cruise due in Nov. HOWEVER, I will not buy any Airfare or Hotels yet. CCL is probably toast, but the nicer ships will sail. Hard to fathom them being mothballed, but corners will be cut everywhere methinks. 

[DaveOKC]

9 minutes ago, LocoLoco1 said:

Being broke has consequences. I have a ‘Freebie’ Casino cruise due in Nov. HOWEVER, I will not buy any Airfare or Hotels yet. CCL is probably toast, but the nicer ships will sail. Hard to fathom them being mothballed, but corners will be cut everywhere methinks. 

No stockholder credits if you are on a freebie cruise.

[LocoLoco1]

Original Post pondered the possibility of a CCL Corporate ‘Reorganization’. As a HAL cruiser, assuming you $paid$ with a CreditCard and you indeed get aboard, would it REALLY matter ?? 

[BermudaBound2014]

17 minutes ago, LocoLoco1 said:

Original Post pondered the possibility of a CCL Corporate ‘Reorganization’. As a HAL cruiser, assuming you $paid$ with a CreditCard and you indeed get aboard, would it REALLY matter ?? 

 

Possibly, but that's not probable IMO. As a cruise consumer people are likely going to be ok because CCL is soooo behemoth in the industry, controlling more than 50% of everyone else combined. They have entire lines to spin off.

 

However; at this debt ratio, I would expect cost cutting measures beyond anything we have witnessed. The industry is extremally fragile (not just CCL). We've never been here before. Personally, I would not be making a deposit on any cruise more than a month away and I'd wait on that until after the first week of August when RCL and NCL report Q3. It's likely they will need to dilute as well. 

[iancal]

1 hour ago, BermudaBound2014 said:

 

Possibly, but that's not probable IMO. As a cruise consumer people are likely going to be ok because CCL is soooo behemoth in the industry, controlling more than 50% of everyone else combined. They have entire lines to spin off.

 

However; at this debt ratio, I would expect cost cutting measures beyond anything we have witnessed. The industry is extremally fragile (not just CCL). We've never been here before. Personally, I would not be making a deposit on any cruise more than a month away and I'd wait on that until after the first week of August when RCL and NCL report Q3. It's likely they will need to dilute as well. 

Agree.  Difficult to cut enough costs in a service based industry...or enough costs to make a dent in the cash shortfalls.

 

I be be very surprised if CCL is not in the process carefully examining the current and projected short term operating profit/loss from each ship across all lines with a view to selling or mothballing the bottom feeders.  Just as they most likely did at the start of the pandemic.  Before or after a management re-org.    At some point the point the bondholders, the lenders, and the major shareholders will be insisting on change.

Edited July 21, 2022 by iancal

[Boatdrill]

A good read from Travel Weekly's columnist about the current and future state of cruise lines and the travel industry as a whole. https://www.travelweekly.com/Arnie-Weissmann/With-Crystal-revival-a-major-miracle

 

A snippet: [during the pandemic, and now] "It was particularly hopeful to see votes of confidence in the travel industry come in from every class of investor: private equity, sovereign funds,  investment banks, public markets, wealthy individuals, and in many cases, existing financial partners who invested even more money.  Money flowed into every industry sector from rental cars to tour operators to cruise to airlines to technology."

.....   "Putting money into travel businesses is, in part, a faith-based decision: faith that travel is inherent to the human spirit. In other words, a safe bet."   

Edited July 21, 2022 by Boatdrill

[rkacruiser]

15 minutes ago, Boatdrill said:

"Putting money into travel businesses is, in part, a faith-based decision: faith that travel is inherent to the human spirit. In other words, a safe bet." 

 

I like that.  Thanks for posting it.  

 

Is there not a business that, at least for the individual investor, not at least a smidgen "faith based"?  One does one's research.  One becomes comfortable with what one learns to make an investment.  One places their "bet" by making an investment.  

 

Along with my investment, HAL retains a future cruise deposit that is refundable on my request.  I am not requesting it.  My faith in the company continues.