Unable to take customers from all over the world on its cruise ships, Carnival Corp expects to sell some stocks in return.
The cruise operator announced on Monday afternoon that it will sell $ 1 billion in fresh shares, as its ships remain docked due to the COVID-19 pandemic. Carnival CCL,
in January it extended its cancellation of departures from the US until the end of April, while also canceling trips departing from Australia and Europe. The company recently announced the planned resumption of Italian departures.
While the coronavirus pandemic closed the cruise lines, investors viewed their actions as a way to play a possible recovery. After falling sharply in early 2020 due to fears of a prolonged closure, the shares have been revived: while the carnival stock has fallen by 37.7% in the last year, shares have gained over 77% in the last six months and almost 50% in the past three months.
Carnival lost more than $ 2 billion in the last quarter, but chief financial officer David Bernstein said when the results were published that the company has “liquidity instead of supporting us throughout 2021, even in -an environment with zero income ”.
Carnival relied heavily on debt offers to overcome the pandemic, including a $ 3.5 billion debt offer earlier this month. The company’s credit rating was downgraded to Moody’s Investors Service earlier this month and is already being rated in junk.
Last month, Truist Securities analyst Patrick Scholes wrote in a note that US cruise ships could remain anchored in 2022, although cruises are more likely to resume later this year.
“We now see July as the best time to restart,” although the fourth quarter is more likely, he wrote.
Shares of Carnival fell by about 2.5% in trading after the program, Monday after the announcement.