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Carnival Stock Price Dropping

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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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Posted (edited)
4 minutes ago, Farts said:

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

Call your broker and see if you can buy some of CCL's bonds on the open market.

Edited by Kenswing

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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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Posted (edited)
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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Posted (edited)
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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2 minutes ago, caribill said:

 

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

The question is if they will be able to borrow enough to get past this period.  If they run out of cash, and cannot borrow to pay their debts than it does not matter how much is owned by one family.

 

Over 9 billion in in current debt, including 4.5 billion in customer deposits for cruises not yet taken, vs 500 million in cash, 450 million in accounts receivables and trade, and a 2.8 billion untapped in a 3 billion revolving line of credit.

 

Lots of assets but pretty much all in ships and land based tourist facilities, not liquid and with the entire industry under fire not sure how much anyone would lend against them.

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Posted (edited)
15 minutes ago, frugaltravel said:

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

I suspect unlike most people here, I live totally off my investments.  Retired 7 years ago, lived and traveled quite nicely off of my portfolio without out any additional income, have grown it quite nicely even while drawing on it.

 

Currently 40% in market, rest in cash or equivalent. Have not sold anything except my cruise line stocks in this down turn, the rest is in indexes.  Totally out of cruise and travel stocks and do not see any reason to buy back into them, until one starts to see the virus dropping off world wide.  This will get worse before it gets better. I do expect that you will see failure of some smaller, weaker airlines around the world and major pressure on the finances of cruise lines

 

Will start putting some money back into indexes in a gradual way.  No real rush there either.

Edited by npcl

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19 minutes ago, RMMariner said:

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.

 

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.

 

Totally agree with you. 

Waiting to see if it holds at or above the Feb 27, 2009 support level at 19.56.  If it breaks that the next support is 15.77

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12 minutes ago, npcl said:

Waiting to see if it holds at or above the Feb 27, 2009 support level at 19.56.  If it breaks that the next support is 15.77

 

I would not be surprised to see some consolidation in the cruise industry as well. Highly leveraged, cyclical companies that rely on continued cash flow do not weather events like this very well.

 

Carnival is probably best set to handle this. Have not looked at Norwegian that closely, but my assumption (possibly wrong) is that it may be the weakest of the big three North American cruise lines.

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1 hour 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 😀

 

Who has said that?

 

My opinion ... there are lots of unknowns, and downward pressure on the stock right now.

I think the stock will continue lower.

 

Eventually, there will be vaccine for corona virus, and stock will go up.

 

Personally, I am not interested in catching the exact bottom; but rather perhaps

buying when the stock has started to recover.

 

I most definately am not interested in buying while the stock is still falling,

as some sort of plan not to miss the exact bottom.

 

 

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10 minutes ago, RMMariner said:

 

I would not be surprised to see some consolidation in the cruise industry as well. Highly leveraged, cyclical companies that rely on continued cash flow do not weather events like this very well.

 

Carnival is probably best set to handle this. Have not looked at Norwegian that closely, but my assumption (possibly wrong) is that it may be the weakest of the big three North American cruise lines.

i haven't read the actual financial report, but ppl on ncl forum has said that ncl has been the most profitable.

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1 hour 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 generally don't try to time the market and it hits bottom, I'm quite happy to get after the bottom and it looks like we have a sustained recovery. Just look at the past 2 weeks when we have had 1000 point drops followed the next day by a 600-800 point recovery, only to drop again on day 3. 

 

My strategy is to wait for the bottom and then pick up CCL/RCL when its come back up a couple of bucks. 

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52 minutes ago, RMMariner said:

 

I would not be surprised to see some consolidation in the cruise industry as well. Highly leveraged, cyclical companies that rely on continued cash flow do not weather events like this very well.

 

Carnival is probably best set to handle this. Have not looked at Norwegian that closely, but my assumption (possibly wrong) is that it may be the weakest of the big three North American cruise lines.

How much consolidation can actually go on? CCL/RCL have dozens of brands under each of their umbrellas. Who are the major players outside of them. I know that NCL, Viking and now Virgin are not under the CCL/RCL brand, any others? 

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1 hour ago, npcl said:

Over 9 billion in in current debt, including 4.5 billion in customer deposits for cruises not yet taken, vs 500 million in cash, 450 million in accounts receivables and trade, and a 2.8 billion untapped in a 3 billion revolving line of credit.

 

Lots of assets but pretty much all in ships and land based tourist facilities, not liquid and with the entire industry under fire not sure how much anyone would lend against them.

 

I think it comes down to three big questions that have no firm answer.

1) How long until the industry recovers.  In addition to the immediate threat of corona virus, there may be lingering loss of confidence in the industry.  Examples like the Concordia suggest cruise lines can weather a big hit and still retain their customers, but no one knows for sure how this will ultimately shake out.

2) We know that they are going to take a major cash flow hit, but as of now I doubt anyone can accurately project how bad it will be.  Obviously the longer this is the bigger the hit, but also the more steps lines can take to mitigate losses.

3) How willing are lenders going to be to step in.  If they are assuming strong positive cash flow is likely in a couple years, its hard to imagine them turning down the opportunity to make some money by lending to CCL and others.  If they think this could have long lasting repercussions, it draws into question both repayment and the value of the collateral cruise lines can put up.  A billion dollar ship won't be worth nearly that if demand for cruising drops 50%.

 

Personally I think it is likely CCL can navigate this mess, but it will be a very painful proposition involving big revenue hits and being forced to take on a lot of debt on unfavorable terms.

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