Why Carnival Stock Dropped Again Today
For the third day in a row, Carnival Corp. (NYSE: CCL) stock is sinking -- down 3% as of 1 p.m. EDT. But here's something that may surprise you: While it seems clear why investors have decided to sell off the stock ... the same catalyst could also be a reason to buy it.
Image source: Getty Images.
Consider: As my fellow Fool Travis Hoium explained Tuesday, investors are upset with Carnival's decision to buy back $2 billion worth of its 11.5% senior secured notes due 2023. In other words, it's paying down its debt, which is generally a good thing. But Carnival is buying back that debt at more than its face value, paying roughly $1,142.50 per $1,000 in the notes' principal value.
Source Fool.com