RCL Stock

[Baron Barracuda]

Noticed the "Risks" section (real and potential issues that could negatively affect the company) grew from 9 pages in 2019 to 14 this year.  Most additions surround uncertainty of re-start and ability to manage higher debt load and related interest expense.  

[Baron Barracuda]

2 hours ago, yknot13 said:

As long as Bookings continue and stock is purchased wildly, they will have cash on hand.

In the meantime.... it is a non-viable business model, great speculation being created on future cruise demand with no guarantees to fuel the demand to buy stock .

Underlying Message "SELL NOW" before it's to late.

Trading in the company's stock has no impact on their cash on hand.  

[yknot13]

6 hours ago, notmyrealnameoremail said:

Please explain why you think Royal has a non-viable business model?

 

Would I be correct to think you have shorted Royal stock since they have a non-viable business model?

 

I'm curious, what companies do you think have guarantees of future demand?

 

Disclosure:  We are holding a small number of shares of Royal and are happy to consider doing so.

 

Tom

At this point in time the business model is not sustainable(non-viable), this will likely change to a positive position over time.

Until such time, speculation drives the price.

Many rode the past ride to the top. (09-17)

Current concern-return start up to service must be 90-100% effective, otherwise industry downturn on the whole will ensue. Perhaps the entire industry makes overwhelming changes.

I trust those at the top fully understand this, perhaps they do not.

 

Finally my investing strategies are just that...my own and not shared.

Just offering my thoughts

 

[notmyrealnameoremail]

1 hour ago, yknot13 said:

At this point in time the business model is not sustainable(non-viable), this will likely change to a positive position over time.

 

This sentence seems to be self contradictory.  If the model is non-viable, then by definition it is not likely to to change to a positive position.

 

1 hour ago, yknot13 said:

Current concern-return start up to service must be 90-100% effective, otherwise industry downturn on the whole will ensue.

 

I'm fairly certain return to service will not be 90-100% effective and I doubt Royal's management thinks that it will be either.  They will have a myriad of contingency plans ready to roll out if/when the time comes.  After all, “No plan of operations extends with certainty beyond the first encounter with the enemy’s main strength.”  Moltke the Elder

 

This is a link to a short article talking about this:

http://connect2amc.com/118-strategic-planning-moltke-the-elder-dwight-eisenhower-winston-churchill-and-just-a-little-mike-tyson#:~:text=The German field marshal%2C known,the enemy” is the popular

 

Just my thoughts.  YMMV

 

Tom

 

 

[The_Big_M]

6 hours ago, notmyrealnameoremail said:

 

This sentence seems to be self contradictory.  If the model is non-viable, then by definition it is not likely to to change to a positive position.

 

 

 

 

Not really. In the current climate the business model is non-viable. If circumstances change as expected then it may be viable again. Hence it's purely speculative.

 

However, just because it's thought positive now is not a guarantee for the future. Remember back in February last year when it was considered viable to continue as it was. What a furphy that was! Then in March when it just required slight changes. Again, wrong. Then in April when the outage would just be a few months. Again, wrong! And so on.

[yknot13]

I appreciate those sharing their thoughts on this topic. Dialogue and understanding make for sound investment strategies. Speculation and hope, are not sound metrics for success.

[firefly333]

1 hour ago, yknot13 said:

I appreciate those sharing their thoughts on this topic. Dialogue and understanding make for sound investment strategies. Speculation and hope, are not sound metrics for success.

I doubt if many are buying at these prices, just holding thru this and hoping profits come sooner rather than later. I too think the price of the stock is in bubble territory and sustained by speculation and hope. Certainly it's not the current earnings or pe. 

 

It's been my experience that once a company operating at a loss finally turns a profit it will come back to earth. Rather impossible to even guess when it will again be profitable. Imo I wouldnt be buying here for investment only for trading. 

[CTCruiser76]

Someone is buying - which is why the price is going up.........I can tell you, its not me. 

[firefly333]

8 minutes ago, CTCruiser76 said:

Someone is buying - which is why the price is going up.........I can tell you, its not me. 

Could be day traders. They play the up and down and out by friday. I agree with you.

 

If I was trading oil stocks been a safer play as oil rises, GE been inching up, CAT and DE on fire with infrastructure talks. Lots of other safer stocks inching up to play. Unless you are shorting. Thrursday would have been a good day to go short rcl? Friday everyone had their shorts in a wad over the 10 year treasury. Tomorrow's direction will be interesting. I love to watch. I wouldnt touch rcl as a hold right now, overbought. It needs some actual restart news, not vaccine hype.

[Baron Barracuda]

Cruise lines are among the most actively traded issues by the hot money crowd on Robinhood.  Positive vaccine news is causing a lot of money to rotate out of the "Stay At Home" stocks (Zoom, Peleton) and into the "Re-opening" ones (airlines, hotels, restaurants, cruise lines).  These baskets of stocks tend to move together so RCG may just be rising along with the group.

[firefly333]

Yield on the ten year treasury dropped, so fewer people supposedly will buy bonds, stocks up today.

 

 

[Blizzard54]

J&J approval may have helped a little.

They only thing down in my portfolio today is Royal.

They announced a 16-million share stock offering @ $91 stock at 92 off a some.

[yogimax]

1 hour ago, Blizzard54 said:

They announced a 16-million share stock offering @ $91 stock at 92 off a some.

Shareholder dilution!

[Baron Barracuda]

2 minutes ago, yogimax said:

Shareholder dilution!

It's only dillutive for anyone who bought above $90.

 

RCG did a good job filling this offering at price very close to prior day close.  Shows high investor demand.  Remember at market bottom last April CCL took huge haircut on new issue, pricing it at $8 at time when stock was trading at $12 

[yogimax]

18 minutes ago, Baron Barracuda said:

It's only dillutive for anyone who bought above $90.

I don't understand your point.  The percentage of my ownership is diluted when more shares are issued.  What does the price I paid have to do with it?

[Baron Barracuda]

4 hours ago, yogimax said:

I don't understand your point.  The percentage of my ownership is diluted when more shares are issued.  What does the price I paid have to do with it?

Yes, your % of ownership is lower however the value of your stake is higher.  if company had $50 in equity with 1 share outstanding and then issued and additional share for $100 is the original shareholder worse off having 50% ownership with value of $75?  Answer might depend on what the company does with the $100.

[yogimax]

2 hours ago, Baron Barracuda said:

Yes, your % of ownership is lower however the value of your stake is higher.  if company had $50 in equity with 1 share outstanding and then issued and additional share for $100 is the original shareholder worse off having 50% ownership with value of $75?  Answer might depend on what the company does with the $100.

Guess we will simply have to disagree on our definition of dilution.

[firefly333]

1 hour ago, yogimax said:

Guess we will simply have to disagree on our definition of dilution.

The opposite would be a stock buy back. Then if there are earnings the pe is figured on fewer shares.

 

Like Berkshire Hathaway is now doing.

[yogimax]

32 minutes ago, firefly333 said:

The opposite would be a stock buy back. Then if there are earnings the pe is figured on fewer shares.

 

Like Berkshire Hathaway is now doing.

Yes, true.  A stock buy back reduces the number of shares outstanding and gives you a greater percentage of the ownership.  

[grandgeezer]

4 hours ago, Baron Barracuda said:

Yes, your % of ownership is lower however the value of your stake is higher.  if company had $50 in equity with 1 share outstanding and then issued and additional share for $100 is the original shareholder worse off having 50% ownership with value of $75?  Answer might depend on what the company does with the $100.

What someone else pays for their stock has nothing to do with what you paid for yours. The actual value of yours will be whatever someone will pay for yours when you decide to sell it. 

[firefly333]

18 minutes ago, yogimax said:

Yes, true.  A stock buy back reduces the number of shares outstanding and gives you a greater percentage of the ownership.  

Exactly, and issuing more shares is by definition dilutive of earnings. 

[Baron Barracuda]

14 hours ago, grandgeezer said:

What someone else pays for their stock has nothing to do with what you paid for yours. The actual value of yours will be whatever someone will pay for yours when you decide to sell it. 

Agree.  but was looking at it more from the perspective of book value not market value.

[crewsweeper]

20 hours ago, Baron Barracuda said:

Yes, your % of ownership is lower however the value of your stake is higher.  if company had $50 in equity with 1 share outstanding and then issued and additional share for $100 is the original shareholder worse off having 50% ownership with value of $75?  Answer might depend on what the company does with the $100.

Your % of ownership is devalued (cut in half by the example) but the value of your share is now $100 (what someone else is willing to pay for it based on latest sale price).

[grandgeezer]

3 hours ago, Baron Barracuda said:

Agree.  but was looking at it more from the perspective of book value not market value.

What does book value mean and what benefit is it to the owner?

[firefly333]

26 minutes ago, grandgeezer said:

What does book value mean and what benefit is it to the owner?

Book value is a accounting term, a way of valuing whatever they own, typically depreciated on some scale. 

 

It has absolutely nothing to do with the price of the stock or its value. A office company might want to speed up depreciation on item like desks in the office faster to pay fewer taxes. 

 

Here is the definition, cost minus depreciation.

 

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In accounting, book value is the value of an asset according to its balance sheet account balance. For assets, the value is based on the original cost of the asset less any depreciation, amortization or impairment costs made against the asset. Wikipedia