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Carnival Stock Price Dropping


Daniel A
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Ask Yourself this question. Why did you buy or why are you considering buying Carnival stock? For several years as the stock had very little movement the reason to purchase should have been based on a combination of dividend return and OBC when on a cruise. Now as the stock has drastically dropped those same two factors are still in play. The dividend could possibly remain the same or in most stock situations drop. One thing that will not drop soon will be the OBC. It is actually possible that it might increase as Carnival uses it as an incentive to both buy stock and cruise. Persons who just started cruising more than once a year and in particular those that go on 14 or more day cruises can experience a quick return of their investment. Just one a half years ago the price was at $60 a share, right now it is at $22.73 and fluctuating. History says that the stock will go back up it is just how long is a mystery. The other factor that will help the cruise industry lower costs is the dramatic decrease in fuel prices. The industry does not purchase from the pump it buys contracts for a stable price. Bottom line is right now you are better off either not worrying about it or buying. The gamble is how much lower will it go?

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2 hours ago, Colo Cruiser said:

7% drop-15 minute stoppage

13% drop-15 minute stoppage

20% drop stop for the remainder of the day.

 

2 hours ago, Colo Cruiser said:

13%


I’m so glad,  that at the suggestion of my broker, I shorted the stock three weeks ago.  👍

Also, bought more gold bars.👍

Revised my “good until cancel” buy order from $18 to $11.  😳

Broker still suggested CCL annual dividend is at risk of being reduced or discontinued entirely.

My broker thought CCL OBC will still be offered as an incentive to cruise on CCL.  
Good luck to all of you that are in for the wild ride down.  Maybe you should by more CCL to dollar average your cost?  Hopefully you will live long enough to realize your stock recovering to what you paid for it.  

Edited by Justalone
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Just now, FrankNJ said:

buy at $10 , then see how it comes out of bankruptcy .   (  just kidding , don't buy it )

I am concerned about bankruptcy.

 

Is there anyway to buy the debt that CCL has? I have never done that before and would appreciate any insight.

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Just now, Kenswing said:

Just remember if a company has to reorganize the common shareholders are usually the first ones to get wiped out.. 

 

Exactly.  If a company reorganizes because they cannot pay their debts, stockholders will be below the debt holders and will get nothing.  A new stock will be issued and the old stock will be wiped out.

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1 minute ago, bluesea321 said:

 

Exactly.  If a company reorganizes because they cannot pay their debts, stockholders will be below the debt holders and will get nothing.  A new stock will be issued and the old stock will be wiped out.

how do i buy that debt? Can I buy that debt?

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6 minutes ago, bluesea321 said:

 

Exactly.  If a company reorganizes because they cannot pay their debts, stockholders will be below the debt holders and will get nothing.  A new stock will be issued and the old stock will be wiped out.

This is the  real  problem owning any stock ;but ,imo it will be a long time for the cruise lines   to recover  ;because , older people will think many times before  buying  any passage 

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47 minutes ago, RMMariner said:

 

Yep. I hate to say it but this is not the bottom. We are in at $45. Cost averaging only works if the stock rises again.

"If" the stock rises again? Are you serious? I am afraid you are. Take a look at the past 70 years...

 

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1 hour ago, akeasley said:

 

Yep, just checked myself. I've been wanting to buy CCL stock for years and am looking to see if it gets lower before purchasing. 

 

 

Good luck with that. People keep saying they want to wait till a stock bottoms out before they buy. But by the time they realize it, the stock is already rising. Don't be greedy 😀

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31 minutes ago, Farts said:

how do i buy that debt? Can I buy that debt?

 

I just checked.  Like Kenswing suggested you can buy Senior Unsecured Debt Bonds of Carnival Corp with a coupon of 7.2% and maturing on 10/1/23 for about $110.   Go for it if you have the guts but keep in mind that if CCL declares bankruptcy you will get nothing back on your principal.

 

Edited by bluesea321
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12 minutes ago, frugaltravel said:

Good luck with that. People keep saying they want to wait till a stock bottoms out before they buy. But by the time they realize it, the stock is already rising. Don't be greedy 😀

I'm in that camp sort of. But I'm not expecting to necessarily grab it at the lowest. I have an idea of where I might buy in depending on how the market continues to go, but I'm also ok buying it a few dollars higher than the low as it hits the upswing. It'll still be lower than where it was when I first looked at it. I was going to potentially buy at $33 to get the OBC. At this point it might still fall more so waiting just seems more prudent since we don't have a cruise til next year.

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13 minutes ago, frugaltravel said:

Good luck with that. People keep saying they want to wait till a stock bottoms out before they buy. But by the time they realize it, the stock is already rising. Don't be greedy 😀

 

If it doesn't happen I won't be too upset. Thanks for the advice though. 

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4 minutes ago, Corazu said:

I'm in that camp sort of. But I'm not expecting to necessarily grab it at the lowest. I have an idea of where I might buy in depending on how the market continues to go, but I'm also ok buying it a few dollars higher than the low as it hits the upswing. It'll still be lower than where it was when I first looked at it. I was going to potentially buy at $33 to get the OBC. At this point it might still fall more so waiting just seems more prudent since we don't have a cruise til next year.

The best might be to set a price you feel is a good price to buy it at. Then put I an order with your broker for that price. It takes the emotion out of it.

 

My guess is that stocks will rebound quickly. Just last week we had 2 days of +-5% increases.

 

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44 minutes ago, Farts said:

how do i buy that debt? Can I buy that debt?

Buy bonds through your stock broker.

 

At this time Carnival still maintains its S&P A- rating  It is an area to watch because any indications that the company is in trouble would be reflected in the bond prices first. Their YTM for a bond maturing on 10/15/20 is 1.467%.  One 10/1/23 has a YTM of 4.036%

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51 minutes ago, bluesea321 said:

 

Exactly.  If a company reorganizes because they cannot pay their debts, stockholders will be below the debt holders and will get nothing.  A new stock will be issued and the old stock will be wiped out.

 

With the majority of CCL stock held in various forms by one family, I doubt there would be a bankruptcy.

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25 minutes ago, frugaltravel said:

Good luck with that. People keep saying they want to wait till a stock bottoms out before they buy. But by the time they realize it, the stock is already rising. Don't be greedy 😀

It may be already rising but I have found it better to give up a little on the way back up, than to grab a falling knife on the way down.

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4 minutes ago, npcl said:

It may be already rising but I have found it better to give up a little on the way back up, than to grab a falling knife on the way down.

Whatever comparisons/analogies you want to make to make yourself feel good 😀😀

Edited by frugaltravel
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17 minutes ago, frugaltravel said:

"If" the stock rises again? Are you serious? I am afraid you are. Take a look at the past 70 years...

 

You misunderstood me. I have been looking to buy back in and dollar cost average, but I would like to do it when it is not in free fall. 

 

As far as all stocks rising again. That is not a given. Carnival is highly leveraged and relies on cash flow. That is a perfect recipe for bankruptcy. I doubt it will happen, but still a slow and shaky recovery is a very strong possibility.

 

I am willing to throw enough money in to buy another couple hundred shares when the price gets low enough, but I am not near confident enough to put real money into Carnival now.

 

2 minutes ago, frugaltravel said:

The best might be to set a price you feel is a good price to buy it at. Then put I an order with your broker for that price. It takes the emotion out of it.

 

My guess is that stocks will rebound quickly. Just last week we had 2 days of +-5% increases.

 

I hope you are right, and in the long term I think it is a given they will.

 

Carnival maybe not so much. The clientele is mainly older, and very risk adverse. Many will think twice before cruising again for a while. The whole cruise line model has been under pressure long before this panic.

 

Last week was what is traditionally called a dead cat bounce. They almost always occur in these situations. I bought in on some quality stocks today. Carnival was not one of them. I know I did not time the bottom, but they are great long term holds.

 

1 minute ago, npcl said:

It may be already rising but I have found it better to give up a little on the way back up, than to grab a falling knife on the way down.

Totally agree with you. 

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