Carnival Stock Below $10

[SwordBlazer Cruising]

33 minutes ago, Inveterate Cruiser said:

 

I'm only saying that CCL will be the first to go under (if they do) because CCL has the worst balance sheet of the 3.......

I disagree w this. The outlook is a whole lot better than during peak shutdown burning a billion a month. CCL will be good however NCL is the cruise line that is clearly the smallest and the lowest market cap with the lowest amount of assests. What do they owe the banks that are financing their ships vs what they got for loams in the marketplace during the shutdown - ALOT. I am not no financial expert by any means and this is simply my opinion. CCL and RCI have much more in terms of assets which in turn will prove to be beneficial over NCL. 

[mondello]

Carnival will weather the storm. They have managed to navigate through the Covid-19 pandemic and millions of cruise addicts need their fix. 

[Illbcruzn4life]

43 minutes ago, Inveterate Cruiser said:

 

I'm only saying that CCL will be the first to go under (if they do) because CCL has the worst balance sheet of the 3.......

Agree but certainly hope that never happens

[BlerkOne]

Carnival has additional ships beginning cruises before the end of the year.

[grandgeezer]

21 minutes ago, SwordBlazer Cruising said:

I disagree w this. The outlook is a whole lot better than during peak shutdown burning a billion a month. CCL will be good however NCL is the cruise line that is clearly the smallest and the lowest market cap with the lowest amount of assests. What do they owe the banks that are financing their ships vs what they got for loams in the marketplace during the shutdown - ALOT. I am not no financial expert by any means and this is simply my opinion. CCL and RCI have much more in terms of assets which in turn will prove to be beneficial over NCL. 

In today’s environment their assets have very little worth. The whole industry is in the toilet so who would want the ships? The banks and other financial institution sure don’t want them, where would they park them until things turn around, if ever. There is a high cost to maintain them and keep them in working order, even if they aren’t being used.

Last week RCL financed $2,000,000,000 to pay some on a couple loans and keep running. To get the money they had to finance at junk bond rates of 11+% interest, and they have a much newer fleet overall than CCL. I think NCL fleet is newer also.

One last thing, how can the outlook look better when the stock prices are much lower than when they had 0 ships sailing?

[Crusin Hogs]

19 hours ago, pc_load_letter said:

 

Hi there! I am sorry, I am trying to understand your statement. When did they turn their nose up at the 30-40% of their customers? Are you referring to unvaxed?

 

Unvaxed have always been able to cruise. I think it was carnival that had 5% reserved for unvaxed folks right from the beginning.

 

I totally respect your choice to not be vaxed. But there are no masks any longer. But yes, for unvaxed there is still pre-cruise testing.

What I mean is that there is a large per cent of the un vaxed  ,not sailing , The reason is  the testing , Us and 2 dozen or more people we know who cruise refuse to cruise  till testing goes away ,It is unneeded ,  100,000 in football stadiums each week ,  Concerts ect no testing no mask  ,, , There are other vacations than cruising that need no test ect to go 

[At Sea At Peace]

1 hour ago, BlerkOne said:

I quote the bible

https://www.cruisecritic.com/articles.cfm?ID=5323

 

 

 

Well, reading the article totally supports everything that I purported as concerns. 

 

If a cruise line goes down, the author even points out the FCCs are worthless. 

 

Regarding the deposits, the author affirms that Customers (Deposits) become creditors WAY DOWN THE LINE and behind the hedge funds and institutions that hold all of the senior, secured debts and their collateral.

 

Customer Deposits, only have a hope and a glimmer of being above 'other unsecured creditors.'

 

So, thank you for the quote that totally supports the concern about the $4-$5 billion in Customer Deposits should CCL head into reorganization.

 

Also, thanks for others contributing to the credit card companies; they are also not bailing anyone out, especially to the tune of $4-$5 billion, whatsoever.

 

😉

[cruisingguy007]

4 hours ago, At Sea At Peace said:

 

If you could cite an article, credit card policy or historical court decision, it is tough for me to agree with this.  I do know there are 'some' agreements regarding some of the deposits, but it likely does not cover this massive amount.

 

The jurisdictional court, in a hypothetical filing, would have this issue up front and center.  The odds of the Debtor and Creditor's Committee leaning towards allowing the these Customer Deposits to be retained and a 'go forward basis, are only increased if the eventual 'debtholders that win the emerging entity' and want to preserve some level of Customer satisfaction.

 

CCL does not have the cash to pay these amounts (neither do the other two in the big three).  Likely, they could not draw on any unexpired lines of credit to do so either.

 

Back to the credit card issuers, by brand or originating bank, they'll make their best efforts to unwind what they can, but they certainly aren't issuing refunds in cash or into accounts of their customers.

 

Goods and services contract. Blerk is right on this one, most would eat the loss, you'd be surprised how much the credit card companies (really the banks) eat, not really, more like write down/off (tax liability reduction), but the number is huge in terms or dollars but makes up a very small portion of transactions in the 3%-10% ratio (it varies). It's made up for by trigger loses and those who actually pay finance charges (the other 90%+ of customers). Most of us are considered "cheap skates", much the same way Blerk calls the gamblers, they pay to service our contracts and every dollar yields a reward of some kind. Though the cruise gamblers actually lose money vs the credit hustlers who play the game to perfection and never lose. 😁   

Edited October 2, 2022 by cruisingguy007

[BlerkOne]

1 hour ago, At Sea At Peace said:

 

Well, reading the article totally supports everything that I purported as concerns. 

 

If a cruise line goes down, the author even points out the FCCs are worthless. 

 

Regarding the deposits, the author affirms that Customers (Deposits) become creditors WAY DOWN THE LINE and behind the hedge funds and institutions that hold all of the senior, secured debts and their collateral.

 

Customer Deposits, only have a hope and a glimmer of being above 'other unsecured creditors.'

 

So, thank you for the quote that totally supports the concern about the $4-$5 billion in Customer Deposits should CCL head into reorganization.

 

Also, thanks for others contributing to the credit card companies; they are also not bailing anyone out, especially to the tune of $4-$5 billion, whatsoever.

 

😉

 

She notes that under the Fair Credit Billing Act, when a merchant doesn't provide services as promised, consumers who used a credit card to pay for that service can file a dispute and get their money back, whether a voyage is simply cancelled, or even if the company goes bankrupt.

"If the company goes out of business, your credit card will get your money back for you," she says, warning that a debit card, while it may look like a credit card, does not offer the same layer of protections.

[tidecat]

44 minutes ago, BlerkOne said:

 

She notes that under the Fair Credit Billing Act, when a merchant doesn't provide services as promised, consumers who used a credit card to pay for that service can file a dispute and get their money back, whether a voyage is simply cancelled, or even if the company goes bankrupt.

"If the company goes out of business, your credit card will get your money back for you," she says, warning that a debit card, while it may look like a credit card, does not offer the same layer of protections.

There are also some trip insurance policies that will cover financial default of the operator (cruise line, air line, etc.) although they typically have a waiting period of 10-30 days from the date you purchase the insurance policy.

[SwordBlazer Cruising]

3 hours ago, grandgeezer said:

In today’s environment their assets have very little worth. The whole industry is in the toilet so who would want the ships? The banks and other financial institution sure don’t want them, where would they park them until things turn around, if ever. There is a high cost to maintain them and keep them in working order, even if they aren’t being used.

Last week RCL financed $2,000,000,000 to pay some on a couple loans and keep running. To get the money they had to finance at junk bond rates of 11+% interest, and they have a much newer fleet overall than CCL. I think NCL fleet is newer also.

One last thing, how can the outlook look better when the stock prices are much lower than when they had 0 ships sailing?

That's why the stock price is not indicative of how the company is truely doing as whole. You actually made a food point. Why was the stock at one point $33 during the height of the shutdown in operations, with ZERO revenue coming in except for customer deposits all the while buring 750m to 1b a month? It goes to show you the market is very messed up.

[SwordBlazer Cruising]

Just now, SwordBlazer Cruising said:

That's why the stock price is not indicative of how the company is truely doing as whole. You actually made a food point. Why was the stock at one point $33 during the height of the shutdown in operations, with ZERO revenue coming in except for customer deposits all the while buring 750m to 1b a month? It goes to show you the market is very messed up.

*good point not food , sorry!

[Colorado Beach Bum]

Bankruptcy doesn’t always mean “out of business” or liquidation.  A company could restructure their debt. Stockholders may be out money but business could survive and customer deposits wouldn’t necessarily be lost.  I think we are a long way from that happening.  

[jsglow]

3 hours ago, Colorado Beach Bum said:

Bankruptcy doesn’t always mean “out of business” or liquidation.  A company could restructure their debt. Stockholders may be out money but business could survive and customer deposits wouldn’t necessarily be lost.  I think we are a long way from that happening.  

And in this case it almost certainly wouldn't.  Just look at the history of the airlines.  And unlike most here, I AM an expert in this field (w/o giving away too much info.)

[At Sea At Peace]

9 hours ago, BlerkOne said:

 

She notes that under the Fair Credit Billing Act, when a merchant doesn't provide services as promised, consumers who used a credit card to pay for that service can file a dispute and get their money back, whether a voyage is simply cancelled, or even if the company goes bankrupt.

"If the company goes out of business, your credit card will get your money back for you," she says, warning that a debit card, while it may look like a credit card, does not offer the same layer of protections.

 

Well, to the extent that the court jurisdiction will allow the Debtor to repay such, i.e., supposedly under the Fair Credit Billing Act, first we should agree that such is a USA legal standard.

 

So, let's look at that, just to start.

 

https://www.travelweekly.com/Mark-Pestronk/The-fine-print-on-credit-card-refunds

 

"Contrary to popular belief, most of your clients do not have a legal right to a refund just because they paid by credit card. The clients need to depend on the nonbinding "policy" of their credit card issuers, which does not always result in a refund.

 

The only relevant law is the Fair Credit Billing Act of 1974 (FCBA), which provides a refund under only these ridiculously limited circumstances: a) you have tried in good faith to get a refund from the merchant, b) the place of purchase must have been in your home state or within 100 miles of your mailing address and c) you must not have fully paid for the purchase. 

 

For most clients, the 100-mile rule and the not-yet-fully-paid parts of the rule mean that clients outside South Florida, where Crystal credit card purchases were processed, or clients who paid in full, including clients who used future cruise credits to pay for their cruises, have no legal rights under the FCBA."

 

Legal interpretations are like opinions, everyone has one.  Read the FINE PRINT in this article.  There is so much out there that confirmation bias is easy to achieve by reference.  🙄

 

It's clear we can agree to disagree.  🙂  You contend using a credit card makes everyone safe, I simply cannot purport such.

 

 

 

 

[At Sea At Peace]

6 hours ago, Colorado Beach Bum said:

Bankruptcy doesn’t always mean “out of business” or liquidation.  A company could restructure their debt. Stockholders may be out money but business could survive and customer deposits wouldn’t necessarily be lost.  I think we are a long way from that happening.  

 

That's correct, but it is by far an undesirable process, the beginning of which would be a group of creditors, or a third party, offering to finance the continued operations guaranteed post-petition by the court.  

 

When the term "company could restructure," the company becomes the Debtor, massive reorganization firms, professionals and law firms enter the scene and are appointed by the court to take over the DTD affairs of the business, usually with retention of select, key management.  Generally, the Board dissolves.

 

The restructuring of "their debt" will be at the negotiated terms of the debtholders with the most senior security positions.  They are hedge funds and similar vultures quite experienced in this process.

 

The customer deposits issues is unique - - - customer deposit cash is not sitting there protected for use by those customers.  The cruise lines are burning the advance customer deposits to provide cruises for those currently (and soon to be) cruising.

 

So, how does a bankrupt cruise line with "no cash" give "cash" back to customers (or to the asserted credit card companies)?

 

2 hours ago, jsglow said:

And in this case it almost certainly wouldn't.  Just look at the history of the airlines.  And unlike most here, I AM an expert in this field (w/o giving away too much info.)

 

The airlines have been funded by the USA government to the tune of almost $100 billion since 9/11.  The cruise have received essentially nothing, and are clearly not in line to get anything at all.

[Tom-n-Cheryl]

11 hours ago, Crusin Hogs said:

What I mean is that there is a large per cent of the un vaxed  ,not sailing , The reason is  the testing , Us and 2 dozen or more people we know who cruise refuse to cruise  till testing goes away ,It is unneeded ,  100,000 in football stadiums each week ,  Concerts ect no testing no mask  ,, , There are other vacations than cruising that need no test ect to go 

Just a hunch, but I'd suspect that whatever minimal effect the cruise line feels from people who share your sentiment, that it would be slightly more pronounced on Carnival.

 

Anyone at this point who really wishes to cruise could easily put aside such objections and jump onboard (yes, and jump through a couple symbolic hoops).

 

Having said all of that, I do agree that at this point there is little benefit to testing. 

 

Tom

 

[Tom-n-Cheryl]

12 hours ago, At Sea At Peace said:

 

Well, reading the article totally supports everything that I purported as concerns. 

 

If a cruise line goes down, the author even points out the FCCs are worthless. 

 

Regarding the deposits, the author affirms that Customers (Deposits) become creditors WAY DOWN THE LINE and behind the hedge funds and institutions that hold all of the senior, secured debts and their collateral.

...

😉

 

40 some odd years ago. I was a cook at a high-end restaurant in Tallahassee which went under. The staff were so low on the totem pole that, even after court proceedings, we got basically nothing. Only those high in the pecking order received anything out of the deal.

 

There was a group of former employees who made a midnight pilgrimage to the premises, and took home some unique (and valuable) "souvenirs".

 

Tom

 

[Veinless]

Time for some unconventional revenue ideas. Bring back FTTF, sell smoking licenses, fine unlicensed smokers, open up a ganja parlour, etc. 

[grandgeezer]

10 hours ago, SwordBlazer Cruising said:

That's why the stock price is not indicative of how the company is truely doing as whole. You actually made a food point. Why was the stock at one point $33 during the height of the shutdown in operations, with ZERO revenue coming in except for customer deposits all the while buring 750m to 1b a month? It goes to show you the market is very messed up.

I think at the time the stock was at $33, there was hope that they would be able to turn it around and get back to profitability in the near future. Stock prices are based on what people think will happen down the road. The current prices says that it might be a long time before this happens, if it ever does.

[mz-s]

Carnival has more debt than its assets are worth and isn't making money so the only reason the stock isn't at $0 now is investors believe the industry has at least some upside potential.

[BlerkOne]

3 hours ago, Tom-n-Cheryl said:

Just a hunch, but I'd suspect that whatever minimal effect the cruise line feels from people who share your sentiment, that it would be slightly more pronounced on Carnival.

 

 

I'm pretty sure it was/is a positive effect for Carnival.

[At Sea At Peace]

3 hours ago, Tom-n-Cheryl said:

 

40 some odd years ago. I was a cook at a high-end restaurant in Tallahassee which went under. The staff were so low on the totem pole that, even after court proceedings, we got basically nothing. Only those high in the pecking order received anything out of the deal.

 

There was a group of former employees who made a midnight pilgrimage to the premises, and took home some unique (and valuable) "souvenirs".

 

Tom

 

 

Yep, it was a nasty process then and it very convoluted still.  Employees 'earned wages' do have some protections, but not for much more especially if there is nothing left.

 

If not by an official CCL announcement, little 'birdies' might be early warning signs; fuel, alcohol and food vendors and suppliers wanting to be prepaid or COD.  There is no requirement to disclose such unless it rises to the level of a 'material event.'

 

The best scenario, if CCL can't make it, is to work with the largest secured debtholders with a 'prepack' plan to bring to the court in reorganization.  Equity gone, lower levels of debt impaired 25-50%, senior levels taking 25-50% in equity in NEWCO and the rest in new debt with long maturities.

 

Keeping vendor relations and customer relations (honoring FCCs and deposits) as part of the deal to sell to the court.

 

We'll see.

 

Good luck to all and hope that I am completely wrong in my observations.  😲

[BlerkOne]

30 minutes ago, mz-s said:

Carnival has more debt than its assets are worth and isn't making money so the only reason the stock isn't at $0 now is investors believe the industry has at least some upside potential.

Royal has over $20 billion in debt and a lot less cash on hand.

[mz-s]

11 minutes ago, BlerkOne said:

Royal has over $20 billion in debt and a lot less cash on hand.

 

And yet this is the Carnival forum.