Cruise Ship Stocks Sink as Royal Caribbean Plans to Raise Capital

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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


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

Norwegian Cruise Line Holdings

(NCLH) was down 6.9%, at

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Sink or swim: How the food and drink sector is adapting and innovating to overcome the challenges of Covid-19

There’s no denying that 2020 has been an unusual year, and one that has presented an entirely unique set of challenges to people in almost all walks of life and society – whether that be adapting to working from home or doing food shopping solely online, to socially distanced socialising and mask wearing while out and about.

It’s safe to say that it’s been an ‘unprecedented’ experience – and no doubt that’s one word we’ve heard to describe it more times already this year than we’d like. From travel to hospitality, banking to fitness, almost every industry and sector has had to adapt quickly to the ever-changing Covid landscape in order to survive, transforming the way we live and work in almost every conceivable way.

Despite the impact on almost all UK businesses, one industry that has had to adapt more quickly than many to the ‘new normal’ and transform

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Highly-Leveraged Norwegian Cruise Lines Stock Could Sink to $0

a large ship in a body of water: NCLH Stock - A Norwegian cruise ship in port

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NCLH Stock – A Norwegian cruise ship in port

With shares of Norwegian Cruise Lines (NYSE:NCLH) at just $17 right now, it’s easy to imagine investors thinking of its $53 levels from just last year and concluding there’s 210% upside as we see a once things “go back to the way they were.”

a large ship in a body of water: NCLH Stock - A Norwegian cruise ship in port

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NCLH Stock – A Norwegian cruise ship in port

There’s just one problem: NCLH stock might not bounce back. In fact, it could sink to $0.

That’s because, as cruise lines draw down credit lines, interest payments begin to creep up. Eventually, these debts can leave scarring on a company’s balance sheet that takes decades to undo. And as thousands of leveraged buyouts have shown, high debt loads also make companies far less likely to survive future crises.

NCLH stock investors beware. You’re getting what

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