If Norwegian Cruise Line Goes Down, Carnival and Royal Caribbean Will Pay the Price
Shares of Norwegian Cruise Line Holdings (NYSE: NCLH) plummeted 23% on Tuesday after the company owned up to its financial shortcomings. It's adding new language to its filings, explaining that the liquidity challenges over the next year are raising "substantial doubt" about the cruise line operator's ability to continue as a "going concern."
This is the kind of scary boilerplate language that precedes a bankruptcy filing if a company isn't able to improve its financial state. Norwegian Cruise Line is trying to bolster its chances of success by offering new senior notes and printing new stock. The problem here is that the negative headlines may be making things worse. Given the situation the country's third-largest cruise line operator finds itself in, with passengers on canceled sailings having to choose between refunds and future cruise credit, this is just the kind of warning that can become a self-fulfilling prophecy.
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Source Fool.com
