I think a 14% drop adequately discounts the fallout from Captain Schettino's little navigational error. The dividend is safe. Those who have already booked can't unbook. And, most important, future bookings will not suffer nearly as much as some think. CCL has many cruise brands, of which Costa is only one. Airlines have crashes in which all passengers and crew die, yet people keep flying. (e.g.I still fly Air France when they have the right schedule, even though one of their planes went down in the Atlantic recently due to a combination of equipment failure and pilot error.) Here we have a case where perhaps two dozen people out of 2,000 may have died. Due to the way cruises are priced and sold, CCL could appear to lower the prices of their cruises without actually impacting the bottom line. Moreover, there is a large population of travellers who like cruises and will not be put off by a single accident. In fact, I will make the bizarre prediction that many will now go the cruise websites looking for bargains, find the same "2 for 1" and "50% off" promotions which are always there, and assume they are getting a cruise at distressed prices. Finally, at some point, Ariston starts to buy back stock.
my rational - we have booked a cruise this coming march with CCL before this incident. CCL will grant $100 per cabin on board credit for purchasing 100 shares of CCL prior to the cruise. now we have credit and stock that will return to normal ($34/s) probably before we cruise.
I think there is a possibility that it could go much lower and as for cancelling booked cruises, I know of 2 families that just cancelled because of this...could be large effect, I just hope its not publicized until I sell as I got it at 29.45
These things generally take a few weeks if not months to run their course.. IMHO. More bad news is probably queued up to come out before good news or folks forget about this bad news... Just my personal opinion and not any investing advice offered or intended...
I think your logic is faulty.
You could have bought this stock last year a lot of the time at $30, and it has moved up because of the Santa Claus and January effect, so if its not based on fundamentals (you ignore the fundamentals where Carnival missed their numbers last qtr and already took down earnings), so claiming this is a 14$ haircut, based solely on friday's close so its sold off enough. again faulty.
You claim you cant cancel a already booked cruise. what??
Lastly, you claim that they could lower the prices of the cruises and not affect the bottom line. what?? There is no way to lower prices only "seemingly". go to a cruise message board and bone up on pricing.
I just found a 5 day out of Galveston for $169 later this month and intend to jump on it tomorrow. (pack n go and it starts at midnight tonight). I have never seen prices that cheap out of Galveston, and its Triumph, almost a Conquest class ship.
There already are bargains to be had. Lower prices on bookings than previous year (per last qtrs earnings, fact). .. prices are already down, no growth going forward, or very little. Stock is making just enough profit to pay out the dividend. Dividend was cut a few years back and just reinstated last year. (for those saying look at the dividend, its come and gone).