Is This Beaten-Down Cruise Stock a Buy?
In recent days, cruise line operator Carnival (NYSE: CCL) (NYSE: CUK) raised $1 billion of new capital by issuing new stock. Prior to that secondary offering, it had been issuing debt to cover its losses as it attempts to work its way back to profitability after its pandemic-related slump. Here's what this latest move could mean for shareholders.
Carnival's secondary offering added just over 100 million shares toits share count of nearly 1 billion. In addition, the deal's underwriters will have the option of buying just over 15 million shares at the offering price. Assuming that they exercise that option, the total of these new shares will amount to about 10.5% of Carnival's equity -- meaning that holders of its previously circulating shares just gave up 10.5% of their equity in the company overnight.
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Source Fool.com
