What happened and why Fancy a social distanced holiday? Carnival (-11.28%) โ the parent company of nine cruise brands, including Princess and Costa โ opened up on a grim set of third-quarter earnings that also shared its plans to flog 18 cruise ships this year. The equivalent to around 18% of the company's fleet... Since March... There has been a halt on cruises, as a no-sail order came into effect in the United States.And since then... Carnival has already sold 8 older-model cruise ships and has delayed the delivery of new ships scheduled for 2021. With cruising at a standstill, Carnival banked a record-breaking quarterly loss of $4.4bn in June and little has changed to tack the cruise giant into the black. With only one ship rolling off the coast of Italy, Carnival is running out of cash, fast. So, needs must... ๐ Rocky waters... With the stock down 68% in 2020, Carnival was forced to launch a $1 billion share sale to raise the cash.๐ค Dough overboard... Carnival has now raised $12 billion since March, despite losing $770M a month and now only has $8bn in cash left. By selling and issuing new shares, Carnival is diluting down the value of its existing ones. With more Carnival shares in the pool, shareholders own less of a company that is in dire need of a vaccine. | The Takeaway Forecast...? Don't think so. Carnival accounts for 45%+ of the worldโs cruise-liners and the deaths of 65 passengers/staff from covid-19 on Carnival-operated ships hit the headlines and brought business to a dramatic standstill. With no clear lift in sight, Carnival is unable to predict a return to normal and left an earnings forecast up to analysts.
