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4 hours ago, yogimax said:

I don't understand your point.  The percentage of my ownership is diluted when more shares are issued.  What does the price I paid have to do with it?

Yes, your % of ownership is lower however the value of your stake is higher.  if company had $50 in equity with 1 share outstanding and then issued and additional share for $100 is the original shareholder worse off having 50% ownership with value of $75?  Answer might depend on what the company does with the $100.

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2 hours ago, Baron Barracuda said:

Yes, your % of ownership is lower however the value of your stake is higher.  if company had $50 in equity with 1 share outstanding and then issued and additional share for $100 is the original shareholder worse off having 50% ownership with value of $75?  Answer might depend on what the company does with the $100.

Guess we will simply have to disagree on our definition of dilution.

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1 hour ago, yogimax said:

Guess we will simply have to disagree on our definition of dilution.

The opposite would be a stock buy back. Then if there are earnings the pe is figured on fewer shares.

 

Like Berkshire Hathaway is now doing.

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32 minutes ago, firefly333 said:

The opposite would be a stock buy back. Then if there are earnings the pe is figured on fewer shares.

 

Like Berkshire Hathaway is now doing.

Yes, true.  A stock buy back reduces the number of shares outstanding and gives you a greater percentage of the ownership.  

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4 hours ago, Baron Barracuda said:

Yes, your % of ownership is lower however the value of your stake is higher.  if company had $50 in equity with 1 share outstanding and then issued and additional share for $100 is the original shareholder worse off having 50% ownership with value of $75?  Answer might depend on what the company does with the $100.

What someone else pays for their stock has nothing to do with what you paid for yours. The actual value of yours will be whatever someone will pay for yours when you decide to sell it. 

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18 minutes ago, yogimax said:

Yes, true.  A stock buy back reduces the number of shares outstanding and gives you a greater percentage of the ownership.  

Exactly, and issuing more shares is by definition dilutive of earnings. 

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14 hours ago, grandgeezer said:

What someone else pays for their stock has nothing to do with what you paid for yours. The actual value of yours will be whatever someone will pay for yours when you decide to sell it. 

Agree.  but was looking at it more from the perspective of book value not market value.

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20 hours ago, Baron Barracuda said:

Yes, your % of ownership is lower however the value of your stake is higher.  if company had $50 in equity with 1 share outstanding and then issued and additional share for $100 is the original shareholder worse off having 50% ownership with value of $75?  Answer might depend on what the company does with the $100.

Your % of ownership is devalued (cut in half by the example) but the value of your share is now $100 (what someone else is willing to pay for it based on latest sale price).

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3 hours ago, Baron Barracuda said:

Agree.  but was looking at it more from the perspective of book value not market value.

What does book value mean and what benefit is it to the owner?

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26 minutes ago, grandgeezer said:

What does book value mean and what benefit is it to the owner?

Book value is a accounting term, a way of valuing whatever they own, typically depreciated on some scale. 

 

It has absolutely nothing to do with the price of the stock or its value. A office company might want to speed up depreciation on item like desks in the office faster to pay fewer taxes. 

 

Here is the definition, cost minus depreciation.

 

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In accounting, book value is the value of an asset according to its balance sheet account balance. For assets, the value is based on the original cost of the asset less any depreciation, amortization or impairment costs made against the asset. Wikipedia

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Book value is simply Stockholders Equity / # shares outstanding.  If all assets and liabilities on the balance sheet are fairly valued it also represents liquidation value.  For some industries (especially financials) analysts consider it a key metric, for other industries it's not as meaningful.  Warren Buffet always talks about Berkshire's price to book ratio in discussing whether his stock is over / under valued.

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5 minutes ago, Baron Barracuda said:

Book value is simply Stockholders Equity / # shares outstanding.  If all assets and liabilities on the balance sheet are fairly valued it also represents liquidation value.  For some industries (especially financials) analysts consider it a key metric, for other industries it's not as meaningful.  Warren Buffet always talks about Berkshire's price to book ratio in discussing whether his stock is over / under valued.

I look at pe and peg. Peg close to 1, or under is well valued..but sometimes those really low pe stocks are low growth. But I look at all the numbers. Peg is good because it throws in growth with the pe.

 

Until rcl resumes cruises to me, it's high risk as a hold. Need earnings to be positive. I expect the traders will continue to have fun, but I doubt many understand the cdc or care.

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Just found this topic. Just out of curiosity; are you holding on to the stock for now or considering selling  like me?

I bought the stock at $70 and now its $93.  I am thinking about selling and then re-buying when the next big dip comes along. Question is of course, will the stock dip again?  Nobody here has a crystal ball of course, just wondering what your strategies are?

For the long term I want RCL in my portfolio so that's my end game.

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6 minutes ago, Marga.Anders said:

Just found this topic. Just out of curiosity; are you holding on to the stock for now or considering selling  like me?

I bought the stock at $70 and now its $93.  I am thinking about selling and then re-buying when the next big dip comes along. Question is of course, will the stock dip again?  Nobody here has a crystal ball of course, just wondering what your strategies are?

For the long term I want RCL in my portfolio so that's my end game.

You would think at these lofty levels it has to dip, but seems the Robin hood gang is playing any travel related stock as if they are all the same. Robinhood trades only on momentum, not value. Surely cant go much higher, but idk. It's not trading on its intrinsic value clearly. 

 

Its reminding me of the tech bubble. How long and how high can it go?

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Royal Caribbean Group closed its underwritten public offering of $16.9m shares of common stock at $91 per share.
 

The company expects to use the net proceeds for general corporate purposes.

Morgan Stanley and BofA Securities acted as joint book-running managers and underwriters.

 

William Blair's read

According to William Blair, following this equity raise, the company has enough liquidity to weather up to 12 more months in an essentially zero-revenue scenario.

 

RCL closed at $94.48, up 86 cents, on Wednesday.

 

https://www.seatrade-cruise.com/finance/royal-caribbean-closes-underwritten-offering-15bn-shares

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Sold our stock last week at $93+.  No dividends at the moment or the near future. Took our profit-bought at $28+.  Have reinvested in a dividend paying stock.  The OBCs we received over the years were more than the original cost .  As we are getting up there in years, don't know if we will cruise again. That doesn't mean we don't hope to cruise again.  We just don't know what the future holds for us. We had a good run.

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  • 2 weeks later...
Royal Caribbean Group completed the sale of its Azamara brand to private equity firm Sycamore Partners in an all-cash $201m deal.

 

This included Azamara's three-ship fleet — Azamara Pursuit, Azamara Quest and Azamara Journey — and associated intellectual property.

 

Royal Caribbean Group said the disposal allows it to focus on expanding its Royal Caribbean International, Celebrity Cruises and Silversea Cruises brands.

 

Fourth ship Azamara Onward

'This creates huge opportunities for all parties,' RCG Chairman and CEO Richard Fain said. 'In fact, as we are inking this deal today, Azamara already has added a fourth ship to their fleet. I am confident that the brand's success and growth trajectory will continue under the stewardship of Sycamore.'

 

The additional ship is the former Pacific Princess, built as R3. It will be called Azamara Onward and is scheduled to begin sailing in Europe in 2022, following an extensive refurbishment. It was handed over Monday and is currently docked at Civitavecchia.

 

'We look forward to guiding and supporting Azamara in its next phase of growth,' said Stefan Kaluzny, managing director of Sycamore Partners. 'The brand's high guest engagement, personalized service and unique destination immersion strategy, position it strongly for continued growth in the upmarket space.'

The team, too

Azamara President Carol Cabezas and the team go to Sycamore with the sale, and Sycamore's Orlando Ashford will serve as executive chairman. 

 

'Today marks a new beginning for Azamara, as we increase our capacity and begin our journey as an independent cruise company. Our beautiful new ship can access smaller ports and allow us to bring our guests to even more destinations,' Cabezas said.

 

'Azamara has a bright future and is positioned to continue growing as an independent company,' Ashford added. 'We can’t wait to welcome back our loyal customers, as well as those new to the brand, with our expanded fleet offering more unique destination immersion programming and itineraries.'

 

Royal Caribbean Group completes $201m Azamara sale to Sycamore (seatrade-cruise.com)

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On 3/8/2021 at 12:02 PM, hancock said:

Sold our stock last week at $93+.  No dividends at the moment or the near future. Took our profit-bought at $28+.  Have reinvested in a dividend paying stock.  The OBCs we received over the years were more than the original cost .  As we are getting up there in years, don't know if we will cruise again. That doesn't mean we don't hope to cruise again.  We just don't know what the future holds for us. We had a good run.

Getting to that point also. In our 70s Over 80 cruises and this pandemic has caused us to start thinking of other things to do. We are still booked up to and including 2023. However, the profit we will have will take us to the point of sell a little at a time so we stay below the max income so as not to pay any tax on it. Does outweigh the OBC that we would receive from it. We still have 700 shares in Royal and 700 shares in Carnival. Had Carnival and sold it before the drop. I then purchased 1000 shares at $9.80. Since then sold 300 shares. That so far is a super winner. So is Royal. Bought 700 shares at $28  and hanging on for now. They are now starting cruises next month. I think it will climb a lot for both once cruising becomes common place again.

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Some interesting tidbits from RCCL's SEC filing yesterday:

 

Booking activity for the second half of 2021 is aligned with our anticipated resumption of cruises. Pricing on these bookings is higher than 2019 both including and excluding the dilutive impact of future cruise credits (“FCCs”). While the brands are still in the process of opening for sale the remainder of their 2022/2023 seasons, first and second quarter 2022 sailings have been open for some time. Cumulative advance bookings for the first half of 2022 are within historical ranges and at higher prices. This was achieved with minimal sales and marketing spend, which we believe highlights a strong long-term demand for cruising.

 

Since our quarterly filing for the quarter ended September 30, 2020, approximately 75% of bookings made for 2021 are new and the rest are due to the redemption of FCCs and our “Lift & Shift” program. We continue to provide guests who were booked on a suspended sailing with the option to request a refund, to receive an FCC, or to “lift and shift” their booking to the following year.

 

As of December 31, 2020, we had $1.8 billion in customer deposits of which approximately 50% are FCCs and the rest are related to new bookings. Approximately 53% of the guests booked on cancelled sailings since our suspension of operations have requested cash refunds.

 

 

Further down in the filing:

 

On March 24, 2021, Royal Caribbean Cruises Ltd. (the “Company”) issued a press release announcing that the Company has commenced a private offering of senior unsecured notes to be issued by the Company due 2028 (the “Notes”). A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

 

The Company intends to use the proceeds from the sale of the Notes to repay principal payments on debt maturing or required to be paid in 2021 and 2022, and the remaining for general corporate purposes (including to pay fees and expenses in connection with such repayments).

 

The Company is in the final stages of the process of obtaining consents from lenders to extend its unsecured term loan due 2022 and the unsecured revolving credit facility due 2022, each by 18 months. Assuming that the Company receives consents from lenders holding 50.1% of outstanding loans and unused commitments under both facilities in connection with the proposed amendments to such facilities, which is the minimum threshold for such amendments to become effective, and that the Company repays 20% of the outstanding indebtedness and commitments in respect of the lenders who consent to such amendments, the Company expects to use the offering proceeds to repay an aggregate of up to $510 million of outstanding principal of indebtedness under its unsecured term loan due 2022 and the unsecured revolving credit facility due 2022.

 

To date, the Company has received indications from over 75% and 85% of the term loan and revolving credit facility lenders, respectively, that they intend to approve the amendment and has received formal consents from at least 50.1% of the lenders on each facility.  However, there can be no assurance that any consents provided on the date of this Current Report on Form 8-K will not be subsequently revoked prior to the effectiveness of the applicable amendments, or as to the ultimate consent rate which we expect to be less than 100%. If the Company does not receive the minimum consents needed, the Company expects to use the entire amount of the proceeds to make principal payments on debt maturing in 2021 and 2022 and for general corporate purposes.

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Staggering $$$ number:

 

According to the Royal Caribbean Gr's most recent financial statement as reported on February 26, 2021, total debt is at $19.58 billion, with $17.96 billion in long-term debt and $1.62 billion in current debt. Adjusting for $3.68 billion in cash-equivalents, the company has a net debt of $15.90 billion.

Let's define some of the terms we used in the paragraph above. Current debt is the portion of a company's debt which is due within 1 year, while long-term debt is the portion due in more than 1 year. Cash equivalents include cash and any liquid securities with maturity periods of 90 days or less. Total debt equals current debt plus long-term debt minus cash equivalents.

To understand the degree of financial leverage a company has, shareholders look at the debt ratio. Considering Royal Caribbean Gr's $32.47 billion in total assets, the debt-ratio is at 0.6. Generally speaking, a debt-ratio more than one means that a large portion of debt is funded by assets. As the debt-ratio increases, so the does the risk of defaulting on loans, if interest rates were to increase. Different industries have different thresholds of tolerance for debt-ratios. A debt ratio of 25% might be higher for one industry and average for another.

Why Shareholders Look At Debt?

Debt is an important factor in the capital structure of a company, and can help it attain growth. Debt usually has a relatively lower financing cost than equity, which makes it an attractive option for executives.

However, due to interest-payment obligations, cash-flow of a company can be impacted. Equity owners can keep excess profit, generated from the debt capital, when companies use the debt capital for its business operations.

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It's not just the amount of debt that 's frightening, it's how in only one year it grew from under $12B to over $19B.  Meanwhile, despite increasing the number of shares outstanding 25% total equity shrank from $12B to less than $9B.  With most of the RCG fleet stuck in layup and losses mounting I hate to think what the 12/31/21 balance sheet will look like.  

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  • 1 month later...

First quarter business update can be found at:

 

Document (sec.gov)

 

Within it is this:

 

Since the last business update, approximately 75% of bookings made for 2021 are new and 25% are due to the redemption of FCCs and the “Lift & Shift” program. The Company continues to provide guests on suspended sailings with the option to request a refund, to receive an FCC, or to “lift & shift” their booking to the following year.
 
As of March 31, 2021, the Company had approximately $1.8 billion in customer deposits, in line with its December 31, 2020 balance. Approximately 45% of the customer deposit balance is related to FCCs.
 
Since the suspension of guest operations on March 13, 2020, approximately 50% of the guests booked on cancelled sailings have requested cash refunds.
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I guess some  are still leery of the start up  going forward without more issues.

 

down $2.50 now and falling.

Edited by Jimbo
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5 hours ago, Baron Barracuda said:

Actually expected 1q (lack of) earnings report to be worse, especially balance sheet.  Market not impressed though, despite positive news from CDC stock still down $2

Stock was up 5 points early but fell to close at -2.57 or $84.90.

 

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