The next focusIR Investor Webinar takes places on 14th May with guest speakers from WS Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
I see you didn't come back to me on the $1 Billion a month cash burn spbhoy
director participation in placings is expected by shareholders. if the directors don't put their hand in their pocket the placing lacks credibility. I didn't literally mean they were forced to but if they don't then it reduces the chances of a successful placing. a director participation in a placing is no guarantee that the sp will shoot up. ask the Sirius Minerals directors. One of them put in 330 grand at 15p last year and seven months later the company was sold at 5.5p just before it went into administration.
follow the money - yes. and that's the point, at the minute there is NO money coming in and no visibility when money will start rolling in
The director who bought $10m worth of shares clearly thinks differently....One of our directors purchased 1.25 million shares of our common stock as part of the Public Equity Offering for a purchase price of approximately $10 million.
Unless of course you believe longtermview's theory that the director was forced into doing this....seriously!!
Follow the money.
Lucky, you've answered your own question - the fact is that, now and for the foreseeable future, Carnival is NOT a cash generating company. As bald eagle rightly mentions, Carnival might survive, but with different owners (these holding the debt) and shareholders could get wiped out, if cash isn't generated in the coming months.
LuckyL, Carnival or a derivation will always exist. The risky thing for shareholders is that the structure of the company may be totally different. Like in some UK care homes....the businesses were refinanced, selling off the buildings (or ships in this case) to third party companies (presumably some sort of hedge fund) who charged extortionate rents. The care homes struggled to meet the rents....a recipe for disaster. Same with some smaller football clubs, who sold off the grounds (about their only asset)....sounded like a good idea, until they hit a sticky financial spot & they don't have an assets. The club disappears...the smart money sells the ground for houses.
CCL have to try to weather the storm (next 18-24 months) and try to keep the sharks at bay.
In my opinion CCL will never go to the wall, there always be money around to finance this kind of cash generating company and beside CCL is the biggest in the world. If some oilier manage to survive at today oil price, by keeping renegotiating their debit to infinity, why shouldn't CCL. Cruise Liner as no rival it will always exist, is not like high street retails that can be replaced by internet shopping. About the current situation and CoVi19 sure, we can all debate about which entry price is a bargain a gamble or long term investment, but what's the point.
Longtermview24 thanks the telegraph had a similar view on the state of affairs
They can and will be doing things. But fundamentally it remains a question of liquidity over an unknown time period.
"... the company will then struggle to survive. "
========================================
Raleigh, from the current look of things a lot of companies will struggle to survive. Some indeed will go to the wall, to be replaced by other entities to provide the service (assuming that there is still demand). Others will use the downtime to prepare for the future and emerge stronger. That's when one really finds out the quality of the management. Headless chickens or visionary leaders!!
I'm not sure where CCL fits in to the above scenario.
Personally I would split the board into two groups...one to cut costs, whilst supporting the workforce. The second preparing for the future e.g. making CCL best in class for cleanliness & virus handling protocols, preparing the fleet for a low carbon future, staff training etc etc.
The aim should be to weather the financial storms ahead and hit the ground running when a vaccine is available.
Bald Eagle. Your assumption cannot be faulted, as a best case safety scenario for travellers, and therefore Carnival and ' the authorities.' As you agree, the availability and timing is unknown, and in 12 months ( perhaps minimum to vaccine, with roll-out on top ) it appears the leisure company will be decidedly moving onto its uppers. On your entirely reasonable opinion, the company will then struggle to survive. But you know that.
spbhoy - you asked where I got the $1 BILLION per month cash burn figure - well it's in the first quarter results RNS. I quote -
"We estimate our liquidity requirements, which include our ongoing ship and administrative operating costs, cash refunds of customer deposits, debt maturities and interest, expected capital improvements, and new ship growth capital not addressed by committed export credit facilities, to be approximately, on average, $1.0 billion per month."
I don't make this stuff up. It's there in black and white if you read the RNS carefully.
A lot of fantasists and thickos on here. Carnival is in trouble. That trouble worsens by the day, every day, until the virus is overcome. Carnival themselves state in their results that they have no clue what the future holds because they have never faced such a situation where their entire fleet is grounded indefinitely.
In ordinary times this is a great business, throwing off a ton of cash. But we're not in ordinary times. They've taken on a shed load of high risk debt which may or may not give them breathing space to survive. The bondholders may end up owning the ships and the shareholders owning eff all this time next year. Equally this could be worth $20 a share if at least some cruises are up an running in the next 6 months.
As it stands today - with the fleet grounded indefinitely - this is a punt not an investment. That's a FACT. Not my fault if you're too stupid to work it out.
I'm a buyer, but not at this level. If it gets a lot cheaper then I'm in for a gamble. Better still, if there is some visibility on when the ships will sail, I'm in as an investment. I don't mind paying a premium to current sp if I'm making an investment based on FACTS as to when their business will be back in business.
"The company cannot forecast what will happen, or when."
========================
Sir Walter, errr, yes they can!!
The management have to assume that their business is dormant until a vaccine for CV becomes available. That's a gievn...it should be written in stone above the boardroom table. ANything else is wishful thinking.
So cut costs....screw the money lenders & high fananciers for all you can ..BUT look after the little people as much as youy can....even if you have to forgoe your bonus for the next 5 years to pay them a subsistence wage. Next year, 12 months, 15 months, even 18 months a vaccine will be ready and 'life' will get back to normal. Although normal is pretty fcuked up IMO.
Sorry LTV but I’ve never heard of a director being forced into a share issue.
Where did you get you get your cash burn figure from...it’s x4 what I can see.
Re the future cruise credit...once it’s accepted it won’t be reversible.
Best let’s stick to facts and not mislead or misinterpret information
On a lighter note, NYSE just closed +6.5%.
but customers wont defer the credits forever. at some point if they don't sail they'll need to refund. the airlines are now being mandated to return cash not credits to passengers in the us.
directors are usually forced to buy in to placings to give the placing credibility. while the amount is impressive, i'd be willing to bet it's a fraction of said directors net worth.
I was genuinely shocked at the cash burn and the amount of money they're holding in deposits for cruises not taken. on top of the cash burn, you can see why the money was raised at such an eye watering rate and has junk status.
In addition: 3. approximately 45% of the guests who have contacted us have accepted future cruise credits in lieu of cash refunds for cancelled voyages.
This would suggest to me that almost half of the $4.7b in deposits could be agreed to be taken as future credit if all those who are booked do as those who have already made contact have done..
Funny what different people pick out of quarterly reports. LTV has focussed on cash burn of $1b per month.
I noticed a couple of things:
1. One of our directors purchased 1.25 million shares of our common stock as part of the Public Equity Offering for a purchase price of approximately $10 million.
2. After transitioning to a prolonged pause, we anticipate estimated ongoing ship and administrative operating costs to range from $200 million to $300 million per month.
I suppose it's all about interpretation.
It should be obvious that there is no business without ships sailing. The passage of time, rather than anything else, is likely their biggest enemy. On existing arrangements they give themselves 12 months survival. On that there is no change. The company cannot forecast what will happen, or when. Nor can we, though we can each have a guess and bet on it, or not.
Yikes. Reads like a Stephen King horror story. Burning through at least 1 billion a month. Probably enough to see them though this year, but that's only if they don't have to repay customer deposits. They're holding 4.7 billion in deposits. If they don't get cruising soon and folk start asking for their money back, then it's game over.
Not sure this is more than a penny stock gamble until free movement recommences. If/when they start sailing, then this becomes and investment and not a gamble. Until then its a gamble/trade betting the cash will last longer than the lockdown.