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Carnival Stock

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In September of 2011 I bought 100 shares of Carnival stock (CUK) at 32.94. This morning I bought 100 shares at 11.92 with the dividends that had accrued over the years. If I'm going down with the ship I'll do it fighting.

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We only purchased ours a few years ago so we paid a premium price!! But, not sure I need any more than the 100 shares.  It’ll be interesting to see if Carnival Corp. changes the onboard credit allowance for a while as they emerge from financial issues the shutdown will most certainly create.

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I was going to wait till it hit the teens but that happened so fast I missed the buying opportunity. 😄

Now I'll wait for it to hit the single numbers which doesn't seem to be very far ahead. 

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I'm still on the fence.  It might be worth the risk from a pure speculative point of view.  But common stock is usually the first thing to get wiped out in a reorganization.. 

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To put the bond market in perspective RCL  11/22 bonds are at YTM 16.791, CCL 10/15/20 now at 13.122 YTM, up from the 3% range just over a week ago.

 

Considering that the 10 year treasury is less than 1%, starting to look like the bond market is expecting a high potential for default.

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5 hours ago, billco said:

In September of 2011 I bought 100 shares of Carnival stock (CUK) at 32.94. This morning I bought 100 shares at 11.92 with the dividends that had accrued over the years. If I'm going down with the ship I'll do it fighting.

 

Stocks often look very cheap before bankruptcy!

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Do we expect the cruise industry to come back?  Ships have always been prone to communicable diseases, and Princess seems to have been a leader in infectious diseases.  So, will the industry return?

 

What might we see?  A full day turn-around, instead of a couple of hours, to do a far better cleaning?  No buffets any more?  What other changes?

 

I just bought another 100 shares of CCL, because I love cruising and want to believe that it will resume shortly with some small improvements.  But I am also have buy orders for some casino stocks in Vegas -- I think these will come back as well.

 

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27 minutes ago, HappyInVan said:

 

Stocks often look very cheap before bankruptcy!

What have I got to lose? I invested $3200 in 100 shares. Now that I have 200 shares it only has to get to $16/share for me to break even. Even if I lose it all I am still ahead since I got $3800 in OBC over the years.

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41 minutes ago, HappyInVan said:

 

Stocks often look very cheap before bankruptcy!

+1

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10 minutes ago, billco said:

What have I got to lose? I invested $3200 in 100 shares.

Maybe $3200.

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I bought 101 shares today. It is what it is. Long term we will be ok. I booked a Princess Cruise next February.

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1 hour ago, Micahs Grandad said:

I think the stock will come back but it will be awhile before they start paying dividends again.

OBC is the only dividend I need and was the sole reason I purchased the 100 shares in the first place.

I could care less how it performs.

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9 minutes ago, ano said:

Maybe $3200.

Only if you sell it.

The OBC is what it's all about.

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1 hour ago, ano said:

Maybe $3200.

$3200 that got me $3800 in OBC. $3200 that generated enough in dividends to allow me to double my shares. At my age losing $3200 isn’t that big a deal anyway. I can’t take it with me.

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Does anyone know what the financial position of Carnival Corp is, do they have big cash reserves, how do they compare to RCCL and NCL

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I keep looking. Last week, it went down then bounced back a bit before sinking again. I'm glad I have recouped my purchase price in OBC and dividends over the years. Looks like the dividend won't survive in the short term.

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3 hours ago, Micahs Grandad said:

I think the stock will come back but it will be awhile before they start paying dividends again.

Well ... except that it still pays $250 on every cruise ....

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39 minutes ago, antsp said:

Does anyone know what the financial position of Carnival Corp is, do they have big cash reserves, how do they compare to RCCL and NCL

It was announced today that CCL has drawn down most of their 3 billion revolving line of credit.  They do not have big cash reserves in the November 10k filing they only had a little over 500 million in cash, at that time they also had 4.5 billion liability in customer deposits.  Thus the reason why they want to give FCC's and not cash refund.

 

Bottom line they will need to borrow fairly quickly.

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31 minutes ago, MauiLvrs said:

Well ... except that it still pays $250 on every cruise ....

We bought it at 18 about 10 years ago and got at least double that in obc. Still planning on cruising several times a year but with the dividends presumably being stopped for now it is not as good an investment. 

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The cruise industry is in serious trouble.

[1] They're highly leveraged

[2] Limited cash

[3] The order book for future ships is large

 

So you have more supply, depressed demand, and short reserves...

 

The issue is not the consumer base within cruise critic. That's going to remain stable or slightly decline. The issue (and major one) is incremental demand and new to cruise. That sentiment is getting pummeled. Add to that the hit China and Asia is taking (this is where cruise supply was supposed to go).  It's going to take years upon years to come out of this and either [1] the entire business model changing or [2] the industry condensing to a new normal in terms of total available consumer market.

 

The counter is this is too big to fail. But we also heard that about Anderson Consulting, Lehman's, and Washington Mutual.

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When I first started looking at CCL a couple of years ago, it was at about $60.  I did not think that the OBC was worth the $6k investment at the time.  Finally decided to get in at $12.45 today.  Even if it drops more, it should not take us long to recoup our money with OBC.

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3 minutes ago, ezd222 said:

The cruise industry is in serious trouble.

[1] They're highly leveraged

[2] Limited cash

[3] The order book for future ships is large

 

So you have more supply, depressed demand, and short reserves...

 

The issue is not the consumer base within cruise critic. That's going to remain stable or slightly decline. The issue (and major one) is incremental demand and new to cruise. That sentiment is getting pummeled. Add to that the hit China and Asia is taking (this is where cruise supply was supposed to go).  It's going to take years upon years to come out of this and either [1] the entire business model changing or [2] the industry condensing to a new normal in terms of total available consumer market.

 

The counter is this is too big to fail. But we also heard that about Anderson Consulting, Lehman's, and Washington Mutual.

Hmmm............welcome to Cruise Critic.  🤔

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16 minutes ago, npcl said:

It was announced today that CCL has drawn down most of their 3 billion revolving line of credit.  They do not have big cash reserves in the November 10k filing they only had a little over 500 million in cash, at that time they also had 4.5 billion liability in customer deposits.  Thus the reason why they want to give FCC's and not cash refund.

 

Bottom line they will need to borrow fairly quickly.

Update on Debt Funding and Other Matters

https://www.carnivalcorp.com/news-releases/news-release-details/update-debt-funding-and-other-matters

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