Carnival Woes Continuing… And Growing (CCL, RCL)
The problems for Carnival Corporation (NYSE: CCL) keep mounting after its Costa lines deadly accident earlier this month. The company has outlined up to a $175 million charge. The move is not just direct costs because there are some overhanging…
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The problems for Carnival Corporation (NYSE: CCL) keep mounting after its Costa lines deadly accident earlier this month. The company has outlined up to a $175 million charge. The move is not just direct costs because there are some overhanging liabilities which are not yet quantified. Class action suits remain a concern, and the awful press relations as a result of the ship captain’s antics are only making matters worse.
To show just how bad this is, Carnival ADRs in New York traded a whopping 39.9 million shares after the disaster and closed down at $29.60 before bouncing. Shares were at $34.28 before the disaster. After recently climbing back to $32.00 per share, the stock has slid and now is down close to $30.00 again. Carnival’s 52-week range is $28.52 to $47.71.
Meanwhile, rival cruise line operator Royal Caribbean Cruises Ltd. (NYSE: RCL) has been suffering alongside Carnival. It wasn’t even the one with a deadly accident. Royal Caribbean’s shares closed at $26.97 after the Carnival incident versus $28.75 the day before. While its shares had recently risen back above $28.50, the stock is now back down to $27.20 versus a 52-week range of $18.70 to $48.27.
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Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
