Why Carnival, Royal Caribbean, and Norwegian Cruise Line Stocks Rebounded on Friday
Cruise-ship stocks climbed on May 8 after Royal Caribbean (NYSE: RCL) provided a business update. Shares of Carnival (NYSE: CCL), Norwegian Cruise Line Holdings (NYSE: NCLH), and Royal Caribbean rose 5%, 3.6%, and 5%, respectively.
With their ships stuck at port due to sailing restrictions imposed by health agencies during the COVID-19 crisis, the major cruise-ship companies are bleeding cash. In turn, Royal Caribbean, Norwegian, and Carnival have all taken on more debt in order to raise the cash they need to survive until their ships can begin sailing again.
On Friday, Royal Caribbean said it had approximately $2.3 billion in cash reserves as of April 30, which it boosted by drawing $150 million from its senior secured credit facility on May 4. "Since late January, we have undertaken several proactive measures to mitigate the financial and operational impacts of COVID-19," Royal Caribbean CFO Jason Liberty said in a press release. "Our focus is on bolstering liquidity through significant cost cutting, capital spend reductions, and other cash conservation measures."
Source Fool.com
