On Friday 13th 2012 the world witnessed the horrific Costa Concordia crash off the cost of an Italian Island. This crash not only had a personal and emotional effect on those on the ship and their loved ones, but also a crippling effect on the financial future for Carnival Cruises and their stakeholders.
Carnival Cruises (ticker symbol= CCL) the parent company of Costa Cruises saw a significant drop in stock prices by a total of 14.2% on Tuesday's opening of the stock market. Since the crash, a reported 11 people on board have died from the incident and approximately 50 people remain missing, indicating that this tragedy is still ongoing and many more people are expected to have been killed. This being so, people who have invested in the Cruise Liner industry fear the strong repercussions that this crash has will have, and already millions of dollars have been lost due to investors and shareholders withdrawing their part from the company. As an investor one must think about the repercussions such as, lawsuits, property damage, and insurance liabilities. However Carnival Cruises (CCL) assures their investors that Carnival has damage insurance and personal injury liability insurance, with a deductible of $40 million in total (still not so good looking). In a statement given by Carnival Cruises, they already reported a loss of $85-95 million dollars due to the non use of this one cruise ship, indicating that this quarter will be financially devastating for the company. On a personal level, call me Maxwell or call me Greene, but this is an opportunity for people to buy Cruise packages or Cruise stocks/shares since most prices will be significantly low due to people's fear of boarding a cruise. However, this incident like most incidents will pass, and people will continue to seek cruises, allowing the stocks to increase during the summer season and allowing those who bought shares at a tragic time, to profit from their risky investments. Of course assuming all RISK!
http://money.cnn.com/2012/01/17/markets/carnival/index.htm?iid=HP_LN
No comments:
Post a Comment