Why Carnival Is Outpacing the Gains of the Market Indexes Today
Shares of Carnival (NYSE: CCL)(NYSE: CUK) were up 2.2% as of 1:37 p.m. Wednesday. Investors seem to still be digesting the cruise ship operator's $500 million stock sale proposal, while an analyst maintained his buy rating on the stock.
Carnival's planned stock offering is somewhat different from what we've come to expect from companies in its segment of the travel and tourism industry over the past year and a half. While many cruise lines have issued stock to raise the cash they needed just to stay afloat, as my colleague Dan Caplinger points out, the company will only be selling this tranche of common stock of Carnival Corp. (CCL) when its U.K.-traded Carnival plc (CUK) shares are trading at a relative discount. It will then use some of the proceeds of the CCL sales to buy back CUK shares.
"As a result, Carnival Corporation and Carnival plc would derive an economic benefit from the offering and the use of proceeds therefrom," Caplinger writes.
Source Fool.com
