Here's a scarey headline for CCL stockholders: Carnival Stock Could Fall to $0 in a Worst Case Scenario

[Daniel A]

2 hours ago, ldtr said:

Keep in mind that most ships in the lines are encumbered. if they sell a line that portion of the debt would go with the line. The amount of money raised by the sale would be limited until they show that the line would be able to operate profitability.

 

By selling off a line they also give up future income that the line would generate.

 

It really would become a trade off in amount of debt held by that line, any additional payments vs the reduction in total revenue. 

 

The cruise line corps actions are pretty limited, until they demonstrate that they can be consistently profitable. Until then any sale lines sold would be at discounted prices.

It sounds like a few lines are fighting over the three Crystal ships 🤷‍♀️

[Stockjock]

I've worked for a big Wall Street firm for over 3 decades.  As such, I am limited in terms of my comments about any specific stock or securities.

But I will say that any stock can go to zero.  Some headline bankruptcies occurred in companies that were highly regarded at one point.

The key is to have enough diversification so that a bankruptcy, while never fun, wouldn't crush you.  And yes, common stocks do usually go to zero when there is a bankruptcy.

True story: Client who was Federal Judge died and his kids inherited a few million from him.  One of the "kids" was his son, who was a longtime pilot for a big airline.

Now, I am prohibited from making a recommendation on an "outside held" stock (we don't hold it), but back then the rules were different.

So the conversation went like this:

Me: If you don't mind my asking, what is your asset allocation in your 401k?

Pilot: Big Airline stock.

Me: What else?

Pilot: Nothing else, 100% Big Airline stock.

Me: And what's the value of your 401k?

Pilot: About $800,000.

Me: Can I make a suggestion?  Sell it all and sell it today.  Maybe keep a small amount, but you have way too much in one stock and even way too much in one sector (transports).

Pilot: Believe me, I know what I'm doing.  I've been flying with Big Airline for over 20 years.  I know the CEO.  He and his wife go to dinner with me and my wife.  Believe me, we are on a great trajectory and I expect to make a lot of money.

Me: You may be right, but you're taking on way too much risk.  If they filed for bankruptcy, you'd likely lose your entire retirement savings.  It's your call, but I'd sell most of it immediately.

Pilot: I'm not selling any of it.  I'm completely confident in Big Airline.  You'll see.  There are a lot of good things that are going to be happening.

As you may have guessed, Big Airline filed for bankruptcy and presumably Mr. Pilot lost most or all of his retirement savings.  And yes, they are still flying and are still a Big Airline.  So companies can do BK, wipe out their full market value, reorganize under bankruptcy laws, continue operations and even issue a new stock.  In fact, it's pretty common to take this route.

You can lead a horse to water...

As a side note, I have personally held companies that filed for bankruptcy on several occasions.  But my holdings were modest and it didn't have an impact on my long-term plan.

Disclaimer: The preceding is presented for educational and informational purposes only.  It should not be relied upon when making investment decisions.  It is not a recommendation for or against securities, an offer to buy or sell securities or a solicitation.

Edited July 1, 2022 by Stockjock

[ontheweb]

1 hour ago, Stockjock said:

Disclaimer: The preceding is presented for educational and informational purposes only.  It should not be relied upon when making investment decisions.  It is not a recommendation for or against securities, an offer to buy or sell securities or a solicitation.

That sounds like a boilerplate disclaimer that was probably written by an attorney for the firm you worked for.

[tetleytea]

It sounds like the takeaway we should get is to buy 100 shares of Carnival stock.   $890 investment constitutes diversification.   CCL going bankrupt is not going to kill you, and in fact you might get a couple OBC's out of it.

[CineGraphic]

We bought 150 shares in the $9.00 range at the beginning of the pandemic, and sold off 50 shares when it was in the $30s again. Those 50 paid for everything.

Even though our 100 shares ended up costing us nothing, it still hurts to see the value go down.

[KKB]

We received a bit of $ from a family trust a few months ago.

Have be hesitant to invest as we are newbies at it & the market has been so volatile this year.

Did buy some Ibonds at a good rate. 

Decided would go ahead & buy CCL & NCL as we could recoup $900 in OBC in the next 7 months...can't get that kind of return anywhere else!

Unfortunately I bought a day early...oh, well. NCL OBC for next month has already posted. Working hard to get CCL on Princess for this month. Covers the loss!

That being said, 100 shares of each of these isn't going to make or break us; did it strictly for the OBC benefit.

Edited July 2, 2022 by KKB

[tetleytea]

CCL stock is not having a good day today.   Down 5%.   I see no news, and S&P 500 is only down 1%.

[KKB]

52 minutes ago, tetleytea said:

CCL stock is not having a good day today.   Down 5%.   I see no news, and S&P 500 is only down 1%.

It's back up 2.38% today. Still early.

 

[tetleytea]

Yeah.  Volatile.

[Musky Ike]

54 minutes ago, tetleytea said:

CCL stock is not having a good day today.   Down 5%.   I see no news, and S&P 500 is only down 1%.

All sorts of news (not good) about airlines, that sends ripples into the travel sector as a whole. If following it hourly I would by stock in antacid companies. 

[tetleytea]

I just saw news that travelling in Europe is the cheapest it's been in a long time.  If I could figure out how to get there in a hot air balloon or something (that uses no gas), I would go.

[KKB]

Bravo to Princess.

Cruising 1x/yr it never hit our radar to buy stock for the shareholders benefit.

But now that we are cruising much more frequently & stock prices are so low, went ahead & bought CCL & NCL. 

But I didn't get all the paperwork squared away until early last week--less than 2 wks b4 sailing. 

I emailed both NCL & CCL Weds afternoon. 

NCL was in the account the next morning--impressive & unexpected.

Princess just hit our account today--got an updated email showing it!

They seem to have a 3 week turnaround but if you let them know you need it sooner, they may just come through!

[geocruiser]

9.38 USD+0.56 (6.35%)today

[LACruiser88]

We purchased our 100 shares of Carnival stock years ago.  Over the years, we have received about 10x+ our original investment in OBC's.

 

Great investment!!!  🙂

[geocruiser]

1 minute ago, LACruiser88 said:

We purchased our 100 shares of Carnival stock years ago.  Over the years, we have received about 10x+ our original investment in OBC's.

 

Great investment!!!  🙂

We also go a lot of OBC back too.

[KKB]

14 hours ago, geocruiser said:

9.38 USD+0.56 (6.35%)today

AAANND back to 8.76...

Reminding me to JUST IGNORE IT...

[ontheweb]

3 hours ago, KKB said:

AAANND back to 8.76...

Reminding me to JUST IGNORE IT...

Good advice!

[tetleytea]

4 hours ago, KKB said:

AAANND back to 8.76...

Reminding me to JUST IGNORE IT...

 

I wasn't going to say anything.  If I did every time the stock swung a lot, this would be a long thread.

[2 cruises a year]

9 minutes ago, tetleytea said:

 

I wasn't going to say anything.  If I did every time the stock swung a lot, this would be a long thread.

Too late, you already have and it already is. 😉

[caribill]

On 7/5/2022 at 10:51 AM, tetleytea said:

CCL stock is not having a good day today.   Down 5%.   I see no news, and S&P 500 is only down 1%.

 

The news:

"In company news, Norwegian Cruise Line (NCLH) said guests no longer need to undergo COVID-19 testing before their cruises. Shares of the company slumped 9.6%, the steepest decliner in the S&P 500. Royal Caribbean Cruises (RCL) and Carnival (CCL), down by about 7.3% and 6.8%, respectively, were the second- and third-worst performers."

 

[Ombud]

On 7/1/2022 at 4:05 PM, Stockjock said:

I've worked for a big Wall Street firm for over 3 decades.  As such, I am limited in terms of my comments about any specific stock or securities.

But I will say that any stock can go to zero.  Some headline bankruptcies occurred in companies that were highly regarded at one point.

The key is to have enough diversification so that a bankruptcy, while never fun, wouldn't crush you.  And yes, common stocks do usually go to zero when there is a bankruptcy.

True story: Client who was Federal Judge died and his kids inherited a few million from him.  One of the "kids" was his son, who was a longtime pilot for a big airline.

Now, I am prohibited from making a recommendation on an "outside held" stock (we don't hold it), but back then the rules were different.

So the conversation went like this:

Me: If you don't mind my asking, what is your asset allocation in your 401k?

Pilot: Big Airline stock.

Me: What else?

Pilot: Nothing else, 100% Big Airline stock.

Me: And what's the value of your 401k?

Pilot: About $800,000.

Me: Can I make a suggestion?  Sell it all and sell it today.  Maybe keep a small amount, but you have way too much in one stock and even way too much in one sector (transports).

Pilot: Believe me, I know what I'm doing.  I've been flying with Big Airline for over 20 years.  I know the CEO.  He and his wife go to dinner with me and my wife.  Believe me, we are on a great trajectory and I expect to make a lot of money.

Me: You may be right, but you're taking on way too much risk.  If they filed for bankruptcy, you'd likely lose your entire retirement savings.  It's your call, but I'd sell most of it immediately.

Pilot: I'm not selling any of it.  I'm completely confident in Big Airline.  You'll see.  There are a lot of good things that are going to be happening.

As you may have guessed, Big Airline filed for bankruptcy and presumably Mr. Pilot lost most or all of his retirement savings.  And yes, they are still flying and are still a Big Airline.  So companies can do BK, wipe out their full market value, reorganize under bankruptcy laws, continue operations and even issue a new stock.  In fact, it's pretty common to take this route.

You can lead a horse to water...

As a side note, I have personally held companies that filed for bankruptcy on several occasions.  But my holdings were modest and it didn't have an impact on my long-term plan.

Disclaimer: The preceding is presented for educational and informational purposes only.  It should not be relied upon when making investment decisions.  It is not a recommendation for or against securities, an offer to buy or sell securities or a solicitation.

Sort of along the line my favorite advisor used to say:

Divide portfolio into core & explore. 80-90% core (index stock ETFs & fixed income) the rest on explore (individual stocks & bonds). If you lose all your explore part, you still can't be hurt that bad. 

[bemis12]

On 7/5/2022 at 8:24 PM, LACruiser88 said:

We purchased our 100 shares of Carnival stock years ago.  Over the years, we have received about 10x+ our original investment in OBC's.

 

Great investment!!!  🙂

 

Your stock still dropped from $60 to $8, just like everyone else's.

[Roberto256]

I read this yesterday.   It expresses concerns about a recession hurting cruise demand.

 

https://investorplace.com/2022/07/ccl-stock-investors-should-let-carnival-sink/

 

If I lose my 'whole' $800 on CCL, I really hope the governement will bail me out.

 

I worked to pay for college, so I never had any student loans for the government

to forgive.   This would just be fair!

 

"Cruise back better."

[Cruise Raider]

On 6/25/2022 at 6:50 PM, Ombud said:

I have my favorite midship decks: Caribe on Grand class / E410-E425 on Royal class /don't like Crown Class but that would be midship on Caribe. Only took me 30 cruises to figure that out. I book early & mark no upgrade. actually got upgraded into those which is how I found them. E424/425 or E409/410 are better than a mini-suite 

Can you tell me if E424 over Crooners on the Royal Princess is noisy at night?  

[LawDog61]

I sold and I am doing the “30 day wash” now, and will harvest about a $1000 tax loss.  I will repurchase in a week, in time to use for my Sept cruise.