Member Info for carvegyber

I would urge all LTH to hold their nerves until at after H1 results. I have made a big bet on it and I am confident.

Mrd, I am sorry to hear that Nickel convinced you to sell at 555p when I was trying hard to convince everyone that he was WRONG complete with my calculations why. Shows you how unreliable his figures are. I think many people here would remember his and my private battle and I have been proven right in the cash burn figures and he was wrong.

The cash burn relates to the capex spends which would be neutralised at $1600 gold and $17 silver. Now that gold is at $18 and silver at $19, that will effectively add another $300m a year of cash generation to the bottom line which is almost all profit. Of course, not the whole of H1 has PM at these prices but you were only looking at 4 weeks of weak gold price and 6 weeks of weak silver price before they recovered.

The H1 results will show a massive increase in revenue YOY which will result in a very big uplift for this share. I took profit at 900p here but I doubled down and bought more when it retraced to 850p after seeing the strength of gold price. I think it has ways to go with central banks printing money to prop up companies. Silver will go along with it and when the economy recovers, will probably go to a ratio of around 85 which brings it to $21.

All the other commodity plays are recovering and you just need to look at Rio Tinto's SP. Silver is being dragged up with it and that is why it is outpacing gold. It has a chance to revert to ratio of 60 once it breaks above $20. It would take gold to be at 1900 but that would mean a silver price of $31! It has happened many times in the past. Let history be your guide.

The update has a bunch of asset sale stuff being dressed up as good news and mostly hopeful statements. The biggest alarm that jumped out at me is the following:
"The pause in guest operations is continuing to have material negative impacts on all aspects of the company's business. The longer the full or partial pause in guest operations continues, the greater the impact on the company's liquidity and financial position."

They have not provided a whole lot of detail on when debt covenants will be breached. Did anyone tune in to the analyst questions? This would be the area I would like to pay attention to to be able to invest in this long term. Otherwise this will just be a trading share to take advantage of retail investor exuberance. Until the vaccine comes, the big sword will still hang over this and if they attempt to start sailing, any outbreak onboard will just sink the company further. I can't see how it can be done with Covid. The Asym is the problem.

Nomad, I would say do the reverse. Sell on good news to take profit and buy on bad news. This is because there is a lot of retail investors out there that will support the SP so every drop, they will buy so you buy the drops, the RI will buy it back up then you sell again on any positive news. Keep trading but don't hold until clear sight of FULL sailing dates.

With extra costs that is going to be built into the sailings with more staff, less passenger, more safety, the profitability will take a big hit and one outbreak on a ship will effectively cost it millions in costs as no one will let it dock. Covid is still rife in Europe and Americas. Out of a few thousand people, there is bound to be a few on board.....

If you bought at 3000, don't even have hope that it will get back there this year because it won't for quite a few years. This is a severely weakened giant and the profitability going forward is very unclear so I can't see it getting back to 3000

If gold goes above 1800, then this will probably start heading to 950 very quickly. I have place my bets on that happening. Could be perfect storm of rising PM prices coupled with great H1 results YOY. Chance even to break 1000. I will be holding until after H1.

Noobz, you will have to get the info either from the CFO's mouth direct or you could trawl through the massive pile of debt T&Cs to work out when the debt covenant will be breached. Best thing is to ask the CFO if they have visibility of this. Just too much information to go find as this is a very big company with lots of debt. I wouldn't want to guess either because it could mislead people.

Also, if you can make any sense of when they will next need to raise cash from the presentation, it would be massively helpful. I know they have enough cash to last 12 months but that is not the time when they have to raise more. It is when they are approaching breach level.

Personally, I would only trade this on spikes of any positive news such as imminent sailing dates. I would only invest longer term when there is a vaccine. This is not one to buy and hold now because with every month, the hole gets bigger so the SP can only spiral downwards. I think a lot of people will be invested thinking this is long term play so when the SP drops, they will just buy. The way to play this is buy on bad news and sell on good news (unless vaccine is here). The big spike will be when there is an imminent sailing date so watch that and sell when that news is out. But don't sell when vaccine is out. Hope that makes good logic

Noobz, you potentially could be right. Travel WILL come back and one day this will be profitable again. On good news, this could well spike up to the teens again but at the moment, I feel to invest in this, I would be flying a little blind because it would be too much trouble to trawl through to see when their various debt covenants could be breached. This is the key to their survival and it is linked to when it can start sailing profitably obviously.

I originally thought CCL would be a great recovery and that's why I started studying it. I am skeptical now and would only invest in this long term with a vaccine in sight. The fundamentals of cruising is different unless a vaccine is found.

I am a fan of a cruise BTW and would love to go back on one.

If that is still too hard to grasp, then just imagine you own a house but you lost your job temporarily and you are using the mortgage to pay your living expenses of £650 a month. After 6 months, you find that you owe £4000 more and your house value is less. Are you still in the same financial state and worth the same?

Am I right in saying that CCL is trying to sell ships in a pandemic when everyone is selling? Do you think you will get top dollar? There will have to be writedowns in assets and that will be across the board. The more I think, the more this seems to be on a knife edge to me.

You have got the wrong end of the stick. I am just replying to someone who is using the past SP to predict the potential future SP of this and I am pointing out why that is misguided because the fundamental numbers of this has changed drastically. This is not a hard concept to grasp. This together with lots of other businesses. They will not get back to the peak in a hurry because PE ratio, debt to equity and even cost basis have been radically altered by the virus.

Peterashbeck, most investors still don't realise that you cannot use the past SP as a gauge for potential upside as in technical investing. The fundamentals have changed. Covid has carved a big hole in the balance sheet. There will be permanent damage with asset sales etc and bigger debt not to mention dilution. Even if it doesn't go for a major equity restructure, this will not get back to the peak it once was in the next 5 years so using previous peak to gauge your potential upside is misguided.

TG, you are absolutely right. CCL will survive because it is a great company and what it offers is fantastic and there will always be demand. Make no mistake but does it include the shareholders' equity in its current form?

That is something that most bullish shareholders is still unable to grasp. Yes, they have cash to last 12 months but most of that cash is debt. There is this thing called debt to equity ratio that are built into covenants of these debt. Because the debt is so huge and complex, not even all CEO are aware and able to plan for it and if the CFO is worth his salt, then he should have a good grasp of it. These are often in the fine prints of debt instruments but they are critical because when the ratio approaches the 'breach level' they will have to pay back the loans or capital raise. Each round will get increasingly more expensive because there is completely no income so the downward spiral accelerates as your credit rating deteriorates.

If you want to invest in this knowledgeably, then you need to study each and everyone of those covenants and estimate when is the next date they will be breached. The expensive loans will get more expensive and as it is, it is already not affordable when you have no income. If it is a capital restructure, it will mean that shareholders will lose out. They always do because you own much less of the company. RBS survived and LLOY survived but shareholders will never get back to where they were unless you buy many many more shares post restructure. Right now this is on a knife edge. I am guessing that it will be needing a restructure by Sep it there is no sailing by then.

This has been downgraded to junk by S&P. I was gonna do a speculative buy here in the 600s but am now having second thought. The money just raised will only last it until sep. By which time, if there is still no sailing in sight, then it will be another money raise and I will be punishingly expensive and it could breach all sorts of debt covenant even though it still has plenty of money. Any sort of restructuring will involve shareholders taking a haircut first because shareholders are the lowest priority in the pecking order. This is what every shareholder needs to be aware of. Keep your eyes wide open here. This is something not every shareholder is familiar with but do tread cautiously.

Even if there is a bailout by US gov, there will still be haircut. Just think back to LLOY and RBS

I think if this drops to below 700p, I will take a punt. With every month of no vaccine news, this will keep burning money and the SP with it. 1.5b will last it couple of months. That's all.

I agree this share has good sentiment that is why I have started taking a closer look. Just inviting someone to try to shoot me down with good arguments. If there was a vaccine breakthrough tomorrow, I would be straight into this.... the cash burn rate is holding me back.

I heard the leader of the Oxford vaccine program said it could be by this autumn!

No, you are wrong there....just share with you my experience with GKP. The debt holders agreed with board on restructuring their debt by issuing share which diluted the existing shareholders 100 to 1 at the average market price. Creditors don't owe the shareholders anything. They don't have to be nice. The company still runs just that your shares effectively becomes the debt holders share in return for them wiping out their debts. Board happy, company happy, workers happy, creditors happy, but shareholders extremely ****ed off and nothing I could do except watch the zeros disappear from the end of my holding. True story.

GKP is still running great today!

I thought the convertible price of the bonds were $8 or £6.50? You say it has enough to last til 2021 but in reality, public companies don't work like that. When cash runs down, even though you still have plenty of cash in your bank, it may breach covenant and you will have to borrow more to fund it. The rate of the cash running down is alarmingly high when you have no income but are still committed to increase your debt with deliveries of new ships. It is double whammy. Shares ARE a gamble but some are more than others and this is just downright flip of the coin because of the nature of the cruise operation. Public companies need to observe a certain cash to debt ratio. If you make a loss but have revenue, you can say it is a blip but with no revenue, it is a matter of time when that is breached and directors are legally required to halt trading if it is going to breach that even if there is plenty of cash left. Unless they restructure of course, which they will with plenty of cash spare. That is how I have seen PLCs work.

At the moment, I can't quite work out what that point will be because of lot of the details are in the terms of the loans/bonds. I went through similar thing with GKP. Shareholders almost wiped but bondholders made a mint! I lost 6 figures.

Right that's it from me. Don't want to frighten people here. Just want to see if there are any people with good information on this to refute the broker note.

I am a fan of cruising and I can see its attraction and that is why I am attracted to this. I agree there is plenty of demand. I would go on one if they restarted tomorrow and if the price is right. But can they do it practically (quarantine) and also what portion of that demand will stay away until a vaccine can be found? For example if you are over 65 and obese, which large proportion of cruisers are, then you might not take that risk. Cost of running in CV times will be high. Lots of uncertainty. What they should start doing now though is run no dock cruises. Just sail somewhere picturesque and then go back to home port....

How long the money can last is the big question and when they can restart, how much money they can generate and will it be sufficient to service the now bigger debt? It is a situation of smaller revenue but bigger debt for sure and what we don't know is how long and this will determine if the company can survive with its current capital structure. If then then any restructuring will always be painful for shareholders. ALWAYS.

Been thinking a lot about buying in for big profits while this is down. It is high risk because parking ships has very high costs. A lot is going to depend on when they can start generating revenue and it looks highly uncertain. It will be months, possibly years before this can get back to profitability again or until the vaccine arrives. Just too uncertain and a bit of a bet at current prices. It now has higher debt but with fewer ships and smaller prospect of revenue, just the cost of restarting operations again would mean that it is unlikely to get back to £50 a share in this decade. If this drops to 600p level again, might be worth a short term gamble on the vaccine success but long term, this share is a big gamble. If it drags on for another 12 months, it could well be chapter 11 and shareholders get wiped while bond holders laugh. Seen this all before with oil companies. Have to be very careful when they raise lots of money from bonds and no income.