Cruise Stocks Fall After Carnival Sells $1 Billion of Shares

(Bloomberg) -- Carnival Corp. is leading peers lower on Thursday after pricing one of the year’s largest equity sales at a steeper discount than usual.

The world’s largest cruise line fell 13% after the sale priced 102 million of shares at $9.95 each overnight, according to a statement. The deal raised about $1 billion that Carnival says it might use to address 2023 debt maturities.

The offering price reflects slightly more than a 10% discount to Wednesday’s close, the steepest awarded across at least five Carnival stock offerings conducted since the start of the pandemic.

“This equity raise will cause concern (actually let’s call it panic) across the investment community for sure,” Stifel analyst Steven Wieczynski wrote in a note. “Why is CCL doing this now when they just raised $1B at 10.5%? Will there be more equity raises coming to address other debt maturities?”

Carnival has now diluted its stock by about 86% since the start of the pandemic, he added. Stifel has one of seven buy ratings on the stock, which also has nine holds and four sells, according to data compiled by Bloomberg.

With shares down 45% this year before the offering launched on Wednesday, Wall Street is also questioning the timing of the deal.

Rival Royal Caribbean Cruises Ltd fell 8.9% and Norwegian Cruise Line Holdings Ltd is 9.3% lower amid speculation they’ll follow Carnival with stock offerings of their own.

The follow-on offering is the fourth-largest of 2022 in the US and the biggest since early June, according to data compiled by Bloomberg, as most issuers have spent the year trying to wait out the market downturn. But companies are looking to address balance sheets amid fears of an economic downturn and the prospect of rising interest rates.

There was another cruise thread where the poster posted this ...

Overall we were happy with the cruise, but the land tour was terrible. I am going to split this review into two sections. I would do the cruise part again, but if you want a land/sea tour go elsewhere!
Cruise Review
Overall we were happy with the cruise part. The rooms were nicely designed and well thought out. The bed was comfortable. We really enjoyed our balcony. It is chilly while the ship is moving, but still for the small amount of time we used our balcony I was glad we had it. For example stepping out to watch the sunset, or a quick check of the gorgeous scenery. I frequently stepped outside for 3-4 minutes just to take everything in. The weather was nice as we pulled out of Ketchikan and it was nice just sitting on our balcony as the ship pulled away.
The wifi was sluggish and poor. Even in our room at times it would not be available. It was constantly disconnecting. It was not available on parts of the ship (the 10th deck)
The selection on tv was poor, but then we really didn’t want to spend too much time in the room anyway
I was thrilled to see aluminum water bottles. Also refill containers in the bathroom. So much better for the environment than plastic.
There is half a day spent at Hubbard Glacier and they had a smaller boat excursion that could bring you much closer to the glacier for better views. That was great and absolutely worth it. That said, there is only 1 smaller boat and it only holds 150 people. That’s it. If you want to do this book it asap. There were many people on our ship disappointed because it was sold out.
The staff was very polite. Our room attendant was great and so was our waiter for dinner. They were attentive to my husband’s dietary issues and were able to get an off menu slice of cake for me from another cafe on the ship. The food was pretty good. Food is well labeled for gluten, vegetarian, sugar free and I think most people with dietary issues should be fine.
Embarkation- something was off. We arrived granted about ten minutes early, but then sat on chairs on a large open area for about 90 minutes before finally being allowed to board the ship. I wish they would have communicated a little better about this. I get stuff happens, and it seemed like something happened to cause a delay, but could have been handled better.
The have two pool areas. One that is outside, and one that is in a glass covered “solarium”. This is important because the weather is frequently not that great. Southeastern Alaska is temperate rain forest. We had several days that were overcast, misty, light rain, 50-60 degrees. Not ideal for an outdoor pool so it was great to have the solarium pool to swim in or enjoy the hot tub.
Nice views for the Metropolitan dining room or when you are in the ocean cafe. There is a Sky Lounge which is stunning. Casino- just expect to lose money :-) We didn’t check out any of the shows.
I didn’t care for the stop at Icy Point. There really is nothing there. I would have much preferred Sitka or another stop. If I took another Alaskan cruise I likely would choose a different ship/itinerary simply for this reason. To be fair, some people were fine with Icy Point. Think it through, look at tour stops, and decide for yourself. There is a gondola to the top. If you are afraid of heights this is all glass and not for you. The views are pretty. When you get to the top there is 1 small viewing area and I was expecting more. If you like zip lines, I hear that is nice. There is also good whale watching- (but there is also good whale watching in Juneau and other towns). We even saw several whales right from the ship.
Land Tour Review
I would never, ever, do this land tour again. There were serious issues with how they handled covid, but even if they handled that correctly I still would never take this land tour.
Best part is the first day they brought is to the grocery store to purchase food. We stocked up on gluten free items and snacks which was a godsend.
There was ZERO care or concern about covid. To start the tour I counted at least 5 coughing people board our bus. One person was clearly fairly ill. None were wearing masks. Why would they allowing obviously sick people to board a bus for a group tour? When we are all trapped together in close space for six days with no way to social distance? We asked about it and were told there is no law that they need to wear a mask, and to “go with the flow”. Six days travelling with sick people on a bus or train. On one segment a couple sat right behind us, both coughing their heads off. There is no good way to move around and avoid these people on a bus. It should be no surprise that our entire group came home with covid. I know at least two other couples on our tour also said they were not feeling well by the end of the trip. They advertise “safety at sea” but all their concerns are nonexistent the moment you leave the ship and board the bus. They really need to test people as they board the bus too.
The Denali Park Village was terrible. The rooms were dark, the mattresses very old (feel those springs!). And, you had limited or no food options. On Monday we did the Tundra Wilderness tour. Our bus left at 6:25am which means we were up very early and didn’t have breakfast. We did have snacks on the bus. We arrived back a little afternoon tired and hungry only to find out that nothing is open for lunch on Mondays in the complex. So being exhausted, just wanting a quick bite and then to chill or nap, we were told we need to take the shuttle to the visitor center to their cafeteria if we wanted lunch. We were not even given information about the shuttle schedule but I believe it either ran once an hour or every two hours. Who does that to a tour group?? Leaving them stranded for lunch? Someone else told us to take the shuttle to the visitor center and then pretend we were on another cruise line to take a second shuttle to Glitter Gulch where you had several food options. Meanwhile I am thinking I should have just booked with a different cruise line. We did do the Cabin Night Dinner theatre one night and I did enjoy that. It was fun and the food was good.
Normally they provide a tour guide per bus. Unfortunately we had 1 guide split between two buses. This was not ideal. I get there are some staffing shortages, but this did leave our tour guide stressed and struggling... Plus let’s be honest. They saved money by having us share a guide. They should have at least provided some token compensation for us- a drink coupon, something....
We were travelling with another couple. On the cruise part our reservations were linked. However this link was lost for the land tour and we were placed on different buses. The tour guide did allow us to ride on the other bus. There were a few minor glitches with us travelling on the wrong bus but they were manageable. If the buses were full we might not have been able to travel with our friends. I would not surprise me to see this happen again.
It seems like many things were being done last minute and details were getting to our tour director the night before or morning of. A few minor issues with buses too. We had to learn a new bus name and driver each day. It really felt like this tour was haphazard a poorly planned. They didn’t have enough premier seats on the train for our group for the Talkeetna to Denali section so ten people had to be downgraded to a lower class cabin. From what I hear they were given a dinner voucher for the next segment as compensation.
An elderly couple in our group with mobility issues was given a second floor hotel room (no elevator so you had to take the stairs). Also our tour director was not going to be around for our last day in Fairbanks. When one couple asked what to do if there were issues with the airport transfers instead of being reassuring (”the hotel staff is all set to help you”) she seemed annoyed and was condescending to them. We were constantly told to “Go with the flow” which was code for “I don’t want to hear about any issues”. Go for the flow is reserved for things like weather problems, etc. Not tour planning issues.
It seems other land tours have a “welcome gathering” or other sort of small gathering with attendees. We didn’t have anything like that. The only “group” activity we had was they insisted we do a group photo in front of the Denali Sign.
Talkeetna- we had a stop there. Not sure why. We did an over priced jet boat tour of the river. It wasn’t bad, but it also wasn’t worth the $79/person we paid. You can catch a flight to Denali from here I hear these flights should be favored over those actually at Denali. (please check as we didn’t do a flight) The lodge we stayed at was alright. The bad part is the shuttle into town stops at 5:45pm. It is 1.7 miles into town. There is no uber. So you are stuck at their hotel and only their hotel for food. If you happen to have beautiful weather (which is rare) it would have a gorgeous view of the mountains and Denali, but most people don’t get lucky with the weather. And if you have dietary issues- well for breakfast, here is a fruitcup you can have.
Sophie Station in Fairbanks- you have a small apartment which is nice. Service at their restaurant was terrible but at least being in Fairbanks you had options and other choices. We stayed at the Marriot in Anchorage which was nice.
Their “tipping guideline” is a bit outrageous. For the tour director $8 day which times the 67 people in our group would be $3200 for 6 days work. Plus you are expected to tip your bus drivers $6 each day, even though some are just short drives. The first day when we had the long drive from Seward and our bus driver was chatting and acting like a tour director (since ours was on the other bus) I thought it was fair, but some days? no.
Separate from any tour- just a note that it seemed restaurants in Alaska struggled with dietary restrictions and don’t fully understand cross contamination issues. If you have dietary restrictions / allergies research carefully. All Celebrity told us is “You are on your own for food” which isn’t a help at all.

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