Carnival Cruise Line holds stock sale to raise funds
Yahoo Finance Live anchors report that Carnival Cruise Line is set to sell $1 billion in stock.
Video Transcript
BRIAN SOZZI: But let's take a look at what's moving this morning. Cruise line operator Carnival shares taking on water after the company said it intends to sell at least $1 billion worth of stock, which will be used for general corporate purposes and potentially paying off its debt maturities in 2023. So $1 billion share offering here, guys. Pretty large, but not surprising, given Carnival is sitting on close to $30 billion in debt. And of course, a lot of that was incurred because they had to survive during the pandemic.
BRAD SMITH: They had to survive. And then on the other side of the pandemic, they had to go through a massive marketing push to reengage with customers. Of course, so much of the base of the travelers, voyagers, if you will, on the cruise lines-- and this is Carnival, this is Norwegian and Royal Caribbean, or Caribbean-- all of them have a base of consumers that are gung ho when it comes to the experience that they get on these cruise lines.
However, it comes at a time where there's still so much of the regulation that each of the cruise line operators have to move through at this point in time. And that's in how they engage with their customers, the capacity of customers that they're allowed to have on, and even for the employee base, how they're engaging and keeping them on board as well.
JULIE HYMAN: I don't really have much to say about this. And we sell shares--
BRIAN SOZZI: It looks like we should be on a cruise with a drink.
JULIE HYMAN: I mean, companies sell shares--
BRIAN SOZZI: We have the no tie look today going on.
BRAD SMITH: I can talk a lot about cruises. I don't want to go on a cruise.
BRIAN SOZZI: You don't want to go on a cruise?
BRAD SMITH: I don't want to go on a cruise.
BRIAN SOZZI: No Amazon Prime, no cruises.
BRAD SMITH: No cruises.
JULIE HYMAN: I mean, I always have that to say, but I have nothing meaningful to say, except you get a share offering, the shares go down. That's just--
BRAD SMITH: Yeah, dilution.
JULIE HYMAN: That's just the math.
BRIAN SOZZI: Analysis continues.
JULIE HYMAN: Yeah, I guess so. As we prepare for the opening bell here on this Thursday morning-- that keeps taking me a minute here today-- you know, I think the ECB is definitely something that investors here in the US are watching, as they unveil this new what they're calling crisis tool. It's unclear what the details of it will be, but it's a sort of a new version of their bond buying program. They're also getting rid of some of their forward guidance.
And Christine Lagarde saying in the press conference that they're going to get to the same final rate. They're maybe just going to do things at a different pace on the way to get there. So I think this is something that investors are paying attention to today--
BRIAN SOZZI: Or maybe not taking seriously enough. This is big news out of Europe. First--
JULIE HYMAN: Well, because I think they're trying to figure out what is this TPI, as it's been-- what does it stand for?
BRAD SMITH: Yeah, it's the Transmission Protection Instrument.
JULIE HYMAN: There you go.
BRAD SMITH: And essentially, they're saying it's going to ensure that the monetary policy stance transmitted smoothly across all Euro area countries. And then their monetary policy is a precondition for the ECB be able to deliver its price stability mandate, so.
JULIE HYMAN: Right, so they're trying to not cause too much volatility, back to what we were talking about with Gargate, with some of these bond prices. But I don't know how that's gonna work.
BRIAN SOZZI: Growth is falling off a cliff overseas. And maybe it's just going to take next week's earnings for more multinational global companies to get investors understanding what is, in fact, happening in Europe, because it's not looking pretty by any stretch of the imagination.
JULIE HYMAN: Yeah, no, it's definitely not. So that's why the ECB came out and raised rates in the first place with this 50 basis point increase. That's the first they've done in a decade.
