Cruise Line Stocks Sail Lower

Cruise line stocks sank Tuesday after Royal Caribbean Group (RCL) said that it plans to raise additional capital to shore up its liquidity throughout the ongoing coronavirus pandemic that has crippled the industry since March. The capital raising entails $500 million in senior convertible notes and a $500 million share offering with a greenshoe option for both, putting downward pressure on the stock by diluting shareholders.

Key Takeaways

  • Royal Caribbean plans to raise $1 billion through debt and equity to shore up liquidity throughout the ongoing pandemic.
  • Royal Caribbean shares broke down on heavy volume below an uptrend line stretching back to the March selloff low.
  • Carnival Corporation & Plc (CCL) shares broke below a rising wedge pattern on decent volume, indicating downside continuation in the short to medium term.

Although a no-sail order by the Centers for Disease Control and Prevention (CDC) expires on Oct. 31, the cruise industry’s

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BUZZ-U.S. STOCKS ON THE MOVE-AMC, Royal Caribbean Cruises, Concho Resources, Theratechnologies

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Futures tracking the S&P 500 were flat on Wednesday on doubts about more fiscal stimulus following an impasse in Washington and ahead of the next batch of quarterly bank earnings after JPMorgan kicked off the season on an upbeat note. .N

At 7:15 ET, Dow e-minis 1YMc1 were down 0.07% at 28,566. S&P 500 e-minis ESc1 were down 0.18% at 3,498.5, while Nasdaq 100 e-minis NQc1 were down 0.05% at 12,088. The top three NYSE percentage gainers premarket .PRPG.NQ: ** Genesis Healthcare Inc <GEN>, up 32.3% ** Capital Senior Living Corp <CSU>, up 13.8% ** Monmouth Real Estate Investment Corp <MNR>, up 10.3% The top three NYSE percentage losers premarket .PRPL.NQ: ** Enzo Biochem Inc <ENZ>, down 10.7% ** J Jill Inc <JILL.K>, down 9.8% ** Sos Limited

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It’s too early to be speculating in the cruise stocks

CNBC’s Jim Cramer advised investors Tuesday to hold off on buying shares of cruise line operators, citing the continued uncertainty during the coronavirus pandemic.

“It’s still too soon to speculate in the cruise stocks. Their domestic ships won’t start sailing again until December at the earliest, and I think there’s a good chance that gets postponed again,” the “Mad Money” host said.

“If you really want cruise exposure, I say be patient, because days like today make me think you’ll get better buying opportunities,” added Cramer, following a Tuesday trading session in which the three major operators all saw their stocks get hammered.

Driving the sell-off was news that Royal Caribbean was raising fresh capital, Cramer said. The company announced it was issuing $500 million worth of stock in a secondary offering and $500 million in senior convertible notes.

Royal Caribbean’s stock in turn fell 13.2% during Tuesday’s session, closing

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Cruise stocks lead S&P 500’s losers after Royal Caribbean’s $1 billion in stock, debt offerings


Getty Images

Shares of cruise companies took a beating Tuesday, with Royal Caribbean Group hit the hardest after announcing a total of $1 billion worth of public stock and private convertible debt offerings, and providing a bookings update.

Royal Caribbean’s stock
RCL
dove 13.2% in afternoon trading, to pace all of the S&P 500 index’s
SPX
decliners. The stock is on track for the biggest one-day decline since it tumbled 14.3% on June 11.

Trading volume jumped to 14.8 million shares, or more than double the full-day average of about 6.2 million shares, according to FactSet.

The stock’s selloff also weighed on Royal Caribbean’s peers, as shares of Norwegian Cruise Line Holdings Ltd.
NCLH
dropped 7.3% to be the second-biggest S&P 500 loser, and Carnival Corp.
CCL
slid 7.2% to be the third-biggest decliner.

Royal Caribbean said before the open that it had commenced a public offering of $500 million

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Why Royal Caribbean, Carnival, and Norwegian Cruise Line Stocks Plunged Today

What happened

Shares of Royal Caribbean (NYSE:RCL) sank on Tuesday after the cruise ship company said it was seeking to raise another $1 billion to fund its operations during the coronavirus pandemic. Fellow cruise ship operators Carnival (NYSE:CCL) (NYSE:CUK) and Norwegian Cruise Line Holdings (NASDAQ:NCLH) also fell on the news.

As of 10:40 a.m. EDT, Royal Caribbean, Carnival, and Norwegian Cruise Line Holdings were down 10%, 6%, and 6%, respectively.

So what

With most of its fleet unable to leave port due to COVID-related sailing restrictions, Royal Caribbean has suffered heavy losses during the coronavirus crisis. In just the first six months of 2020, it generated a net loss of $3.1 billion. 

Unfortunately, those losses are set to grow even larger in the coming months. Royal Caribbean said that while it hopes to resume voyages by Dec. 1, it could “provide no assurance” that it will be able to restart

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Cruise stocks lead S&P 500’s losers after Royal Caribbean’s $1 billion in stock, debt offerings


Getty Images

Shares of cruise companies took a beating Tuesday, with Royal Caribbean Group hit the hardest after announcing a total of $1 billion worth of public stock and private convertible debt offerings, and providing a bookings update.

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Royal Caribbean’s stock (RCL) dove 11.1% in midday trading, to pace all of the S&P 500 index’s (SPX) decliners. The stock is on track for the biggest one-day decline since it tumbled 11.3% on June 24.

Trading volume jumped to 9.8 million shares, already more than the full-day average of about 6.2 million shares, according to FactSet.

The stock’s selloff also weighed on Royal Caribbean’s peers, as shares of Norwegian Cruise Line Holdings Ltd. (NCLH) dropped 7.4% to be the second-biggest S&P 500 loser, and Carnival Corp. (CCL) slid 6.9% to be the third-biggest decliner.

Royal Caribbean said before the open that it had commenced a public offering of

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Cruise Ship Stocks Sink as Royal Caribbean Plans to Raise Capital

Text size

A Celebrity Infinity Cruise ship, owned by Royal Caribbean Group, in Miami.


Joe Raedle/Getty Images


Royal Caribbean Group

unveiled plans Tuesday to raise $1 billion in new capital, the latest effort by a cruise operator to shore up liquidity as business remains sharply curtailed by the pandemic.

Royal Caribbean (ticker: RCL) said it has launched a private offering of $500 million in senior convertible notes due 2023, with a purchaser option to buy an additional $75 million of the convertible notes. It has also launched a public offering of $500 million shares of common stock, with an underwriter option to buy $75 million in additional shares.

Shares of all three major U.S. cruise operators were lower after the news. Royal Caribbean was down 10.9%, at $62.19, in recent trading, while rival

Carnival

(CCL) was off 6.5%, at $14.22, and

Norwegian Cruise Line Holdings

(NCLH) was down 6.9%, at

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Royal Caribbean Slides as It Looks to Raise $1 Billion From Stocks, Notes Offerings

Royal Caribbean  (RCL) – Get Report shares were falling after the cruise ship operator said it was raising $1 billion between stock and convertible bonds as the company struggles to weather the coronavirus pandemic. 

Shares of the Miami-based company were down 10.9% to $62.22.

Royal Caribbean said in separate news releases that it had begun an offering of $500 million of common stock and $500 million in convertible notes.

Each offering can be increased by up to $75 million should the respective underwriters choose to purchase as well, the company said.

The company said it expects to use a portion of the net proceeds from the offering to repay its 2.65% Senior Notes due 2020, with the remainder to be used for general corporate purposes.

Morgan Stanley and Bank of America Corp. are leading the stock offering.

“The disruptions to our operations resulting from the Covid-19 pandemic have

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BUZZ-U.S. STOCKS ON THE MOVE-Walt Disney, Royal Caribbean Cruises, Amazon, Micron

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At 9:35 a.m. ET, the Dow Jones Industrial Average .DJI was down 0.16% at 28,790.77. The S&P 500 .SPX was down 0.13% at 3,529.58 and the Nasdaq Composite .IXIC was up 0.03% at 11,879.838. The top three S&P 500 .PG.INX percentage gainers: ** Walt Disney Co <DIS.N>, up 4.2% ** Micron Technology Inc <MU.O>, up 3.3% ** EOG Resources Inc <EOG.N>, up 2.8% The top three S&P 500 .PL.INX percentage losers: ** Royal Caribbean Cruises Ltd <RCL.N>, down 9.5% ** Norwegian Cruise Line Holdings Ltd <NCLH.N>, down 6.2% ** Fastenal Co <FAST.O>, down 5.1% The top three

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A chief investment officer says industrial and rail stocks are a good buy if Washington passes a big stimulus bill


  • Bryn Mawr’s chief investment officer Jeff Mills told CNBC’s “Trading Nation” Monday that investing in material, industrial and rail stocks are likely to yield great returns once US lawmakers agree on another set of measures to help the economy. 
  • He said: “We think industrials will do well in either political environment, that is how I would want to be positioned over the next 12 months.”
  • Mills said he would still avoid investing in cruise and airline stocks that have been heavily impacted by the pandemic. 
  • Democrats and Republicans have been gridlocked in a stalemate over fiscal stimulus since July. 
  • Visit Business Insider’s homepage for more stories.

The time may soon be right to buy industrial, materials and rail stocks, all of which have been beaten down by the coronavirus pandemic this year, once US lawmakers reach an agreement on a new round of financial lifelines for the

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