What took place
Cruise liner stocks sank on Tuesday after Norwegian Cruise Line Holdings( NYSE: NCLH) stated it had “significant doubt about [its] ability to continue as a going issue.”
It’s not easy being a cruise ship operator during a global pandemic These beleaguered cruise ship companies have actually been forced to turn to the financial obligation markets to raise money in hopes of remaining afloat until their ships can resume sailing when again.
Cruise ship stocks fell sharply on Tuesday, following an insolvency warning by Norwegian Cruise Line Holdings. Image source: Getty Images.
Even if Norwegian is able to get the cash it needs, the coast is still far from clear. The rising number of COVID-19 cases in the U.S. and other parts of the world are making it progressively likely that health companies like the Centers for Disease Control and Avoidance (CDC) may extend sailing limitations for cruise ships. Even worse still, even when these limitations are raised, lots of people may select to forego cruise liner travel due to fears of getting sick.
Hence, despite their recent– and potentially future– capital raises, Norwegian, Royal Caribbean, and Carnival are likely to remain in a battle for survival. Unless a vaccine or effective treatment for COVID-19 is established soon, insolvency could be a regrettable possibility for several of the significant cruise ship operators.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy.
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Joe Tenebruso has no position in any of the stocks pointed out.
The Motley Fool suggests Carnival. The Motley Fool has a disclosure policy