View Single Post
Old 07-22-2022, 12:20 AM   #765
tiltrider1
Guru
 
tiltrider1's Avatar
 
City: Seattle
Vessel Name: AZZURRA
Vessel Model: Ocean Alexander 54
Join Date: Aug 2017
Posts: 4,308
Quote:
Originally Posted by BruceK View Post
Here`s a snippet from a financial report:
"Shares of cruise lines dropped after Carnival said it would sell $1 billion of new stock. Carnival fell $1.24, or 11%, to $9.85 and was the biggest laggard on the S&P 500. Royal Caribbean Group and Norwegian Cruise Line Holdings were also among the index's top decliners."
Not sounding positive. They must have lost vast $ income while still carrying expenses. No surprise they are running cruises back to back even with Covid occurring on board.
Let’s take a good look at what this really means. Carnival is raising a billion dollars of cash by selling additional stock, why? Is it because they expect to burn through cash to stay alive, or do they see an opportunity to acquire capital assets at fire sale prices? The Market sees a significant number of new share holders that will now be sharing the same old company profits, this means less revenue per share so naturally Market made an adjustment.

What if Carnival acquires several competitors and doubles its revenue? The Market will quickly go up. Stock price fluctuations are so short sighted that you can’t really read anything into them.

I do not like boom or bust investments. I would never invest in a cruise line or an airline for that matter. I can’t understand what people see in cruises, add to that the potential for mass illnesses. Yet, I see people rushing back to go cruising. I don’t think the industry is dead.

The truth is more likely that we here on TF do not understand the mind of the average middle class worker who lives in Kansas City and has never seen the Ocean except for the one time he/she went on a cruise.
tiltrider1 is offline