NCLH Stock Price

[BermudaBound2014]

@Formula280SS We are flying to Hawaii after the first of the year and I have zero hesitation about getting on a plane. The overnight in Oakland will require some extra precaution, but I truly believe that the science is on our side.

 

I originally set a target of Q321 for return to cruising. At this point I'm not as hopeful. NCL is down today, but no more than anything in a typical travel portfolio. I predict that at some point the bottom is going to drop. I hope I'm wrong, but I just don't see a path to recovery even if we start sailing immediately. 

 

 

 

[Formula280SS]

An FYI update on the Short Interest (% and shares) and the % of shares held by Institutions.

 

[Formula280SS]

We'll have to wait to see if todays negativity regarding the vaccine and the stock price continues throughout the week.

 

Looks like the slow roll out of the vaccines, the virus variant and the increase in infections and hospitalizations in some states in the USA and some countries in Europe have the bean counters (meant affectionately) influencing the analysists and the markets at the outset of 2021.  Also, the awareness that some crews have been notified of cancellation of return to work status for the time being.  

 

These factors appear to 'push even the test resumption phase of cruising way beyond our expectations of January 2021 when first discussed months ago.  With this, along with Dr. Glooms comments over the weekend of a possible "national lockdown" (IMO, not Constitutional but a total lack of (common sense) regard for the 'science known as geography; i.e, entire low density states (and counties and towns) have little to no current resemblance to southern California and other current hard hit locations). 

 

It would conceivably be more logical to restrict movements in and out of hot zones rather than attempt a coast to coast blanket approach.  

 

This consideration of 'not making sense may also be the reason the cruise lines and investors are adding months to the expected return to cruising. 

 

The trend continues to be that CCL looks too large (has and had an older fleet reliance and is getting 50 cents on the dollar of pre-virus FMV on such ships being sold off) and has too much of a monthly loss and cash burn rate and NCL looks too small to be able to ride out the virus storm (even at a proportionally lower month loss and burn rate).  It appears from some calculations that, at June 30, 2021, NCL will have only 90-days of liquidity from existing funds.  It also appears they really don't have much of anything left to leverage in debt.

 

RCL continues to be the 'pick of the litter from the cruise line stock perspective per the market.  Hard to tell if that lasts also.

 

IMO ~

 

RCL is the most likely to survive with equity intact and secure either additional debt or renegotiated terms and conditions on existing debt (if the USA FED is involved again).

 

CCL is the next most likely to survive, but not intact (it may have to purge subsidiary lines in order to get the above RCL considerations).

 

NCL is the most likely to work out a creditor pre-packaged event to sustain restructuring the line financially (with loss of and to equity).

 

 

Edited January 4, 2021 by Formula280SS

[98420934]

On 1/4/2021 at 11:00 AM, Formula280SS said:

It appears from some calculations that, at June 30, 2021, NCL will have only 90-days of liquidity from existing funds.  It also appears they really don't have much of anything left to leverage in debt… NCL is the most likely to work out a creditor pre-packaged event to sustain restructuring the line financially (with loss of and to equity).

 

Thanks for your posts about NCL's stock price. I'm not a financial person so they are helpful to read.

 

This article at the Motley Fool seems to indicate that NCL can run through July 2022 with the cash they have now: "Norwegian… should have $3.6 billion in the bank today. That's… sufficient to keep it afloat for 20 more months." Do you think that's an overly optimistic view?

Edited January 8, 2021 by 98420934
Added quote.

[mystik]

On 1/4/2021 at 5:00 PM, Formula280SS said:

We'll have to wait to see if todays negativity regarding the vaccine and the stock price continues throughout the week.

 

Looks like the slow roll out of the vaccines, the virus variant and the increase in infections and hospitalizations in some states in the USA and some countries in Europe have the bean counters (meant affectionately) influencing the analysists and the markets at the outset of 2021.  Also, the awareness that some crews have been notified of cancellation of return to work status for the time being.  

 

These factors appear to 'push even the test resumption phase of cruising way beyond our expectations of January 2021 when first discussed months ago.  With this, along with Dr. Glooms comments over the weekend of a possible "national lockdown" (IMO, not Constitutional but a total lack of (common sense) regard for the 'science known as geography; i.e, entire low density states (and counties and towns) have little to no current resemblance to southern California and other current hard hit locations). 

 

It would conceivably be more logical to restrict movements in and out of hot zones rather than attempt a coast to coast blanket approach.  

 

This consideration of 'not making sense may also be the reason the cruise lines and investors are adding months to the expected return to cruising. 

 

The trend continues to be that CCL looks too large (has and had an older fleet reliance and is getting 50 cents on the dollar of pre-virus FMV on such ships being sold off) and has too much of a monthly loss and cash burn rate and NCL looks too small to be able to ride out the virus storm (even at a proportionally lower month loss and burn rate).  It appears from some calculations that, at June 30, 2021, NCL will have only 90-days of liquidity from existing funds.  It also appears they really don't have much of anything left to leverage in debt.

 

RCL continues to be the 'pick of the litter from the cruise line stock perspective per the market.  Hard to tell if that lasts also.

 

IMO ~

 

RCL is the most likely to survive with equity intact and secure either additional debt or renegotiated terms and conditions on existing debt (if the USA FED is involved again).

 

CCL is the next most likely to survive, but not intact (it may have to purge subsidiary lines in order to get the above RCL considerations).

 

NCL is the most likely to work out a creditor pre-packaged event to sustain restructuring the line financially (with loss of and to equity).

 

 

what cruise company does nclh have with them. thanks. 

 

[Formula280SS]

1 hour ago, 98420934 said:

 

Thanks for your posts about NCL's stock price. I'm not a financial person so they are helpful to read.

 

This article at the Motley Fool seems to indicate that NCL can run through July 2022 with the cash they have now: "Norwegian… should have $3.6 billion in the bank today. That's… sufficient to keep it afloat for 20 more months." Do you think that's an overly optimistic view?

 

I don't know what data the author is using for the $3.6 billion calculation.

 

Per the September 30, 2020 10Q Quarterly SEC filing, you can not that the Cash on Hand is $2.4 billion.  Further, the Footnotes disclose that they have exhausted (used to the MAX), their two large Credit facilities (Lines of Credit).  I know they had a $500 million private debt offering in December; looks to needed for the 2021 debt service payments if they can't get relief.

 

In addition to the monthly loss and cash burn rates, now looking like well into the Fall and possible Winter of 2021, they have also $472 million in debt payments due (which will need to get negotiated).

 

https://www.sec.gov/ix?doc=/Archives/edgar/data/1513761/000155837020013385/nclh-20200930x10q.htm

 

 

So, if you look at their Total Current Assets of $2.652 billion, assume they'll not be able to refinance the almost half billion due in 2021 in debt payments (thereby planning to use the $500 million they just raised in new debt), they'll burn through what they have quite rapidly, as well as spending quite a bit more to reassemble crew, prepare for test cruising, etc.  By September, again assuming they don't make the debt payment, they'll be down to a couple of months of cash remaining.  IMO.

 

IMO, not investment advice, just for discussion, they will have already breached so many of their debt covenants with regards to financial ratios, etc. that they will have to begin the discussion with the creditors (debt holders, debt investors) by at least the end of Spring.

 

 

 

Edited January 8, 2021 by Formula280SS

[BermudaBound2014]

It's just a matter of time folks. Writing has been on the wall since May. The fun speculation now is who will acquire/merge? My money is on RCL, but MSC is not to be ignored. They do operate the largest shipping company in the world and since they aren't publicly traded who truly knows how much cash is in the cow. I know this is a forum filled with NCL fans and I'm not dissin on NCL, as this is just basic economics. They are the smallest fish in the pond. The music stopped and and it is highly unlikely there are enough chairs to go around. Like everything, time will tell.

Edited January 8, 2021 by BermudaBound2014

[mscdivina2016]

21 minutes ago, BermudaBound2014 said:

It's just a matter of time folks. Writing has been on the wall since May. The fun speculation now is who will acquire/merge? My money is on RCL, but MSC is not to be ignored. They do operate the largest shipping company in the world and since they aren't publicly traded who truly knows how much cash is in the cow. I know this is a forum filled with NCL fans and I'm not dissin on NCL, as this is just basic economics. They are the smallest fish in the pond. The music stopped and and it is highly unlikely there are enough chairs to go around. Like everything, time will tell.

My money is on MSC.  I am a huge NCL fan and user but I doubt they can survive on their own if this drags on for several more months.

 Like you said, MSC is an unknown financially but I bet they are cash fat and to acquire part or all would give them the a bigger share of the industry. IMHO opinion they are the only ones still making money with their shipping company and they actually has cruise ships sailing in Europe.

Steve

[Named-Tawny]

58 minutes ago, mscdivina2016 said:

My money is on MSC.  I am a huge NCL fan and user but I doubt they can survive on their own if this drags on for several more months.

 Like you said, MSC is an unknown financially but I bet they are cash fat and to acquire part or all would give them the a bigger share of the industry. IMHO opinion they are the only ones still making money with their shipping company and they actually has cruise ships sailing in Europe.

Steve

 

I guess the question is, if MSC does acquire NCL, what do they do?  Do they keep the NCL branding and run business as usual?  Keep the branding, and have NCL and MSC 'specialise' in different areas?  Rebrand NCL to MSC ships?

[Formula280SS]

14 hours ago, BermudaBound2014 said:

It's just a matter of time folks. Writing has been on the wall since May. The fun speculation now is who will acquire/merge? My money is on RCL, but MSC is not to be ignored. They do operate the largest shipping company in the world and since they aren't publicly traded who truly knows how much cash is in the cow. I know this is a forum filled with NCL fans and I'm not dissin on NCL, as this is just basic economics. They are the smallest fish in the pond. The music stopped and and it is highly unlikely there are enough chairs to go around. Like everything, time will tell.

 

First, I really like the NCL brand, the Breakaway and + Class.  Of late we've been big on MSC (Yacht Club) on both Seaside and Meraviglia Classes, and NCL (Haven or not), but also enjoy RCCL Quantum and Anthem classes.  Love them all.

 

Second, it's not their fault that a 100 year global pandemic was released into the world, that therapeutics would take 3-6 to slow the death rate, that a vaccine (although developed in unprecedented speed) would take 9-12 months to be fully administered to the populations, etc.  Like restaurants, hotels, resorts, airlines and so many businesses in lockdown states and countries, the CRUISE lines cannot simply exist shut down for what appears to be at least a year and maybe another half.  Like these other industries, the cruise industry will lose players, at least in their existing profile and with regards to their equity ownerships.

 

So, back to NCL, their 9/30/2020 10Q discloses many pertinent details on their debt.  Their lines of credit, surprisingly, have decent, low interest rates and extended dates for renewal.  Their pre-virus debt issuances are not too bad either with regard to the rates.  The post-virus debt issuance, some at least, are problematic.

 

December of 2021 has a maturity schedule for $700,000,000.  It needs to be refinanced "if the collateral is still available" and hasn't been tiered in favor of the newer, emergency Senior creditors.

 

However, with just a few unexpected rough water events in the coming 3-6 months, the creditors (debt holders) will be in the discussion loop.  Once word of that leaks (sorry for pun), and Future Cruises stop making deposits and payments, the ONE BILLION in Customer Deposits dries up.  That, although we're not happy, has been 'free money, and a life line, for the cruise lines.

 

Too much close to happening.

 

Then we see the creditors making moves already.  Certain of the debt issuance are rising dramatically since June, from face value to 200% of face value.  This does not imply faith in the debt, IMO.  As the other issuance remain at or below face value, the specific creditors/investors in the newer debt are comprised heavily of "hedge funds with a penchant for distressed debt." 

 

WHY worry?  Well, they are sharks.

 

The first objective to eliminate existing equity via restructuring.  The second is to put the twin-screws (a ship term 😉) to the "lower tier, lower secured by assets" debt classes.  Next up, partition off the smaller subsidiary lines.  Then, after the seas have settled, continue the brand with a lot less debt, and with them at the helm.

 

We'll still continue to see the beautiful NCL ships.

 

IMO.

 

[mscdivina2016]

13 hours ago, Named-Tawny said:

 

I guess the question is, if MSC does acquire NCL, what do they do?  Do they keep the NCL branding and run business as usual?  Keep the branding, and have NCL and MSC 'specialise' in different areas?  Rebrand NCL to MSC ships?

It would make sense to keep things as usual.  You don't want to mess with a loyal customer base. Whether they would honor all that FCC is another question? 

 Now the FCC.....why don't they put an expiration of 10 years on it? This spreads out the free money, this does not make people to hurry up and use it and allows cash paying customers to fill cabins instead of free passengers.

 My assumption would be they jacked the prices to offset the extra 25% but the higher fares are moot if everyone is using FCC. What good is sailing ships that you are not earning anything on.

Steve

 

[BermudaBound2014]

16 hours ago, mscdivina2016 said:

. IMHO opinion they are the only ones still making money with their shipping company and they actually has cruise ships sailing in Europe.

Steve

 

Just for clarification: I don't believe MSC has any ships sailing in the Europe at this time. They had to cancel all the Magnifica and Grandiosa sailings several weeks ago. I think the Grandiosa is scheduled to restart again at the end of January, but as we all know, that is never a given when it comes to Government.  

 

On a side note: There was also very low customer demand for those Europe sailings and I think low customer demand will be what ultimately sink the ships (ridiculously stupid pun). 

 

2 hours ago, Formula280SS said:

We'll still continue to see the beautiful NCL ships.

 

Of course, I hope I didn't imply that the brand would be eliminated entirely. I just don't see how things can continue without a major restructuring, and when that happens it's typically shareholders (and FCC holders in this case) that take the hit.

 

On a lighter note, Grandour and Rhapsody are in 'warm lay-up' in the USVI, so there is a glimmer of hope for USA sailings by spring. 

https://www.cruiseindustrynews.com/cruise-news/24175-two-royal-caribbean-ships-will-be-in-warm-lay-up-in-bvi.html

 

Edited January 9, 2021 by BermudaBound2014

[BermudaBound2014]

2 hours ago, Formula280SS said:

 

First, I really like the NCL brand, the Breakaway and + Class.  Of late we've been big on MSC (Yacht Club) on both Seaside and Meraviglia Classes, and NCL (Haven or not), but also enjoy RCCL Quantum and Anthem classes.  Love them all.

 

ME TOO! I will admit openly that I have zero brand loyalty. Each brand brings something to the table. The promenade on the Breakaway (and +) category is a spectacular use of space. And then there is the brew house for hubby. I've sailed YC and regular balcony on MSC and find them to be the absolute best value in the industry. RCL Quantum class offers really unique entertainment options (I could I fly all day) and 270 is my favorite venue space at sea.

 

PS: Since Quantum and Anthem are the same class of ship, I believe you might have meant to say you enjoy Quantum and Oasis class? I waited years to sail an Oasis class due to pricing, and was super ecstatic to sail Allure, but overall I wasn't thrilled. I think that might have just been a situation of having too high of expectations. I'm going to give her another try once cruising opens back up.

[BermudaBound2014]

26 minutes ago, BermudaBound2014 said:

On a lighter note, Grandour and Rhapsody are in 'warm lay-up' in the USVI, so there is a glimmer of hope for USA sailings by spring. 

https://www.cruiseindustrynews.com/cruise-news/24175-two-royal-caribbean-ships-will-be-in-warm-lay-up-in-bvi.html

 

 

Sorry: Grandeur and Rhapsody are in BVI not USVI

[Formula280SS]

1 hour ago, BermudaBound2014 said:

 

ME TOO! I will admit openly that I have zero brand loyalty. Each brand brings something to the table. The promenade on the Breakaway (and +) category is a spectacular use of space. And then there is the brew house for hubby. I've sailed YC and regular balcony on MSC and find them to be the absolute best value in the industry. RCL Quantum class offers really unique entertainment options (I could I fly all day) and 270 is my favorite venue space at sea.

 

PS: Since Quantum and Anthem are the same class of ship, I believe you might have meant to say you enjoy Quantum and Oasis class? I waited years to sail an Oasis class due to pricing, and was super ecstatic to sail Allure, but overall I wasn't thrilled. I think that might have just been a situation of having too high of expectations. I'm going to give her another try once cruising opens back up.

 

Ooops.  Yep, I did.  Thanks.

 

The Quantum Class if our favorite RCL of the two, although we did some really great cruises and B2B's on Oasis/Allure.  The Quantum Class ships seem to us to be more seaworthy in tougher seas (that's just an IMO, I have no idea); almost like a longer and narrower fresh water lake boat that cuts through the water and chop better than the wide beam, top heavy yachts.  And that is a good thing.  Two of our latest cruises on that Class returned to New York in severe storms, one requiring crossing the 'noreaster in order to get life saving medical attention to passenger a day early.

 

I'll also say, as you mentioned, the activities on RCL Quantum and Oasis Classes are numerous and worth it.  We did activities over and over and over as we cruised around holidays, school vacations etc.  

 

Also, although MSC's Ocean Cay is now our #1 private island, by a really long shot, the RCL Dragon's Breath Zip Line on Labadee (of which I have a go pro video of my zip after 3 tries to get the right camera angle; haven't figured out the upload yet) is my personal favorite physical and adventurous excursion.

[dexddd]

Like I said back in April or March, which got deleted, I could see MSC taking over NCL.  I could also see Haven become YC, however, NCL staff would have to go through major service adjustment.

 

That would also give them three private islands.  Heck, even the new NCL ships are same as MSC..

 

Maybe chance for FDR to retire.

[sfaaa]

My vote is also on MSC as a potential business partner to take over NCL. Buying or merging with NCL on the cheap will give MSC immediate access to existing NCL cruise routes currently not open to MSC especially the lucrative and popular Alaska market. The Italian family that owns MSC is very wealthy, has deep pocket and wants to become a big player in cruise industry.

[Steff79]

hope that never will happen, don´t like MSC

[gtaylor]

2 hours ago, Steff79 said:

hope that never will happen, don´t like MSC

Easy peasy, don't book them.

 

gary

[98420934]

On 1/8/2021 at 2:27 PM, Named-Tawny said:

I guess the question is, if MSC does acquire NCL, what do they do?

What would happen to stockholders in this kind of situation? I don't have any stock, so I'm not in the game, but I'm curious to understand how it would work for stockholders.

[sfaaa]

One scenario can be that MSC will buy up all the public trading shares of NCL at an offer price after doing a business valuation of the company and then takes it private.

[Formula280SS]

On 1/9/2021 at 11:13 AM, BermudaBound2014 said:

 

Of course, I hope I didn't imply that the brand would be eliminated entirely. I just don't see how things can continue without a major restructuring, and when that happens it's typically shareholders (and FCC holders in this case) that take the hit.

 

 

IMO, you're right.

 

The realities of the availability limitations on the vaccines, the now elongated timeline (based on the current approved vaccines), the exasperation of how to vaccinate the crew members, various country, port and state-to-state travel restrictions, post-travel self-quarantine requirements, and possible vaccination documentation to cruise, are combining to really limit any hope of returning to cruising in 2021 to any level of normal passenger levels, if at all.

 

So, although I love the NCL ships, and I believe the ships will sail again, I simply do not believe that NCL can "make it" to the other side of the financial damage ramifications of this pandemic as currently structured and financed.

 

I totally hope that I am wrong.

Edited January 25, 2021 by Formula280SS

[complawyer]

On 3/9/2020 at 9:55 AM, Hrhbob said:

I was SO very proud of myself when i bought my NCL stock when it dove down to $33. As we speak it is at $21.52!  Well heck....

hate  to rain on your parade, or rub it in, we bought it at $7.00

[Formula280SS]

1 hour ago, complawyer said:

hate  to rain on your parade, or rub it in, we bought it at $7.00

 

IMO, take the 3X and RUN.

 

😲👍

[complawyer]

59 minutes ago, Formula280SS said:

 

IMO, take the 3X and RUN.

 

😲👍

no, unfortunately (or fortunately) we only bought 100 shares, so i'm holding on to them.its already gone to $27