Why Is Carnival Stock Worth More Than $8 a Share?
Cruise lines were dealt a heavy blow during the initial stages of the COVID-19 crisis. Investors walked the plank the moment that Carnival (NYSE: CCL) (NYSE: CUK) and smaller rivals Royal Caribbean Cruises (NYSE: RCL) and Norwegian Cruise Line Holdings (NYSE: NCLH) shut down their passenger sailings in March. The ocean splashes weren't pretty.
Hungry for cash by early April, Carnival made some pretty desperate financing moves. It issued secure bonds yielding nearly 12% in this otherwise low interest rate environment. It also sold $500 million worth of stock at $8 a share. Those investors are feeling pretty good about now. The stock has more than doubled over the past five months, but are the gains warranted? Is Carnival really twice the company it was in early April? Let's take a closer look at the challenges and opportunities awaiting Carnival stock and its investors in the coming months.
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Source Fool.com
