Saudi Arabia Has Taken a Major Stake in Carnival. What Does it Mean?
The world's largest cruise line, Carnival (NYSE: CCL) accounts for roughly half of all cruises across the entire world. At the moment, the company's fleet of over 100 ships remains docked, with no clear timetable for when sailings will begin (though the company does say it will restart some U.S. operations in mid-May).
Of course, any date is little more than wishful thinking for now. It's also nearly impossible to predict when customers will feel comfortable cruising, when the company will be able to resume its full schedule, and when some ports will re-open to cruise ships.
As you might imagine, this has created a cash crunch for Carnival, causing its shares to drop by roughly 80%. It costs about $1 billion a month to operate the cruise line, which has led the company to sell 71,875,000 shares of common stock at $8 per share (well below its 52-week high of $56.04), a move which may have opened the door for some large investors -- including Saudi Arabia's Public investment Fund, which now holds an 8.2% stake in the cruise line.
Source Fool.com
