Is Carnival Stock A Silent Portfolio Killer?


Carnival stock (NYSE:CCL) is all set to attract investors. From the 52-week high, there is a 70% stock price that has come down. It is being assumed that after the devastation of the COVID-19 pandemic the decline has affected the price of the stocks heavily. However, it can be expected that the situation will improve a bit after the massacre of the pandemic heals to a certain extent. 

The cruise industry has to postpone its voyages to the seas. Even though Carnival stock holds the largest stock in the market, it cannot hold the ventures forever. The Carnival stock could turn into a killer of the portfolio instead of waiting for the bargain, given that the pandemic is not showing any signs to end any time soon.

Carnival Stock Sees Some Signs Of Hope

Carnival stock went down during the mid- January and mid-March. The company has also seen a hike of $25 for each share, before falling back. Since March the company has witnessed dips in the price of the stocks. Miami Herald reported recently that the Carnival stock would rise as the company resumed the operations of the cruise from the first of March. Most probably the company will see a relaunch of the ventures around the U.S and also around the world. But it is still doubtful how much people will invest in the cruise since the fear of the deadly virus is still haunting the world. 

With the given situation of the pandemic, it is really difficult to say how long the company will remain afloat. The investors too may find the Carnival stock a sinking deal amid the pandemic situation. In the last quarter, $31 million in revenue was drawn by the company. If the cruise starts from the first of December, the quarter that is still ongoing will come to an end by the 30th of November. This signifies that the company is seeing no notable increase in revenue and is still undergoing a huge cash burn. Also, the company is still under a debt of $18.9 billion. The total worth of the company leaving the asset liabilities aside is at around, $19.5 billion. 

It’s very crucial for the Carnival stock that the No Sail Order is lifted by the CDC. if that does not happen the company will face further and more severe difficulties. If new liquidity options are not explored by the company soon, the price of the Carnival stock would further decline, leading to a grotesque bankruptcy of the company. Therefore, naturally, until the situation looks up for the company, the Carnival stock will not find many investors because that could cause severe damages to their portfolios.