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Royal can last 10-12 months without revenue


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So I stumbled onto this video where a stock guy talks about Royal Caribbeans financials and the current situation they find themselves in. According to him they can last 10-12 months without revenue before needing bankruptcy. Interesting video that I'm sure you smart people will understand much better than this truck driver. ? Let me know what you think. Hopefully no arguments.

 

 

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Depends on how you look at revenue. RCI has been getting loans to sustain itself, so as potential buyer of stock, you have to look at how much debt they are taking on versus incoming revenue. Will they be able to pay the debt back with interest, pay off bond holders, and Saudi Sheiks, to be able to remain solvent. RCI was making 5 Billion a year before the pandemic occurred which brought us such things as Coca Cay, new ships, and future research and development. How long will it take to get back to that - that is the question?

When a stock drops 80% of its value  it’s normally for a reason. You have to figure out how bold you and try to capture a falling knife. They always say it is good to buy when the crowd is running in fear and sale when all are extremely happy. Hard to do as we are fear based people. It’s either terror or being over joyed .  Look at their earning statements going forward and really no one knows what’s going to happen next in revenue. I wouldn’t want to the CFO trying to forward forecast revenue. 

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Yeah I'm not a stock guy in any way, no way. I'm just looking at it from a pure passenger/fan prospective and when told get dicey about will they survive at all. That's all I care about it in the end. I don't really care what happens to the stock or if they can get back to the same profit they had before all this. 

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They’ll survive. It will just slow down innovation for the future. Revenue will be down for a couple of years as they pay off debt. New ships won’t come out as quickly or get cancelled and new play areas in the Bahamas will be put off. Cruises work off selling tickets to people with disposable income, and we had lots of it, but now the number of people with that level of income will drop for awhile as we get back to work.

On the good side, if you have the money, there should be some great sales for 2021 and 2022 as all the future cruise credits make their way through the system and what’s left is lots of rooms chasing few people that have money. I’m thinking that new cruisers will not come to cruise unless the prices are really tempting - you know the floating petri dish viewpoint that everyone talks about. Most of my non-cruising friends have said those words to me in the past month -  like why would you ever go back to that floating Petri dish?  That’s what cruise lines are up against going forward. They had some bad publicity and it’s going to be hard to get past that sentiment in the near-term. 

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1 hour ago, RCIfan1912 said:

Well this is good for me because I plan on going on cruises in 2021 and 2022. Hopefully our Sept cruise goes off with an issue. 

On the other hand the shipyards are gonna feel a pinch if ships are getting cancelled. That's not good. 

Yes, life as we know it has changed -- forever.  However, we can still shape our future.  It just won't be the same as our past.  I am determined to cruise when it is safe, and I believe it will be safe in late 2021.  Just my opinion.  Be safe....

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That time frame is loosely what I've calculated myself.  

No for-profit company can operate with zero revenue indefinitely.  Bankruptcy is always on the table not as a last ditch effort but as a financially viable means to remain a company.   Airlines do it, many companies do it.  That's why it's a thing although it does have consequences.  

Filing for bankruptcy does not automatically equate to investors losing their entire investment.  It's not like a company files for bankruptcy protection and immediately all investors lose everything.  It's doesn't work that way.  A bankruptcy filing protects a company from their creditors as they negotiate their way forward under court supervision.  For example, suppliers who have not been paid and are owed money by a company are more likely to be impacted than an investor who is in it for the long haul.  Investors may see their investment tank to record lows and many will choose to jump ship at substantial losses out of a fear that a company might not emerge from bankruptcy but that is often their choice to do so.  

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Not sure if it was this video or another, but they looked at how much cash they have from customer deposits and future cruise fare. It was nearly 3 times what they normally have on hand in cash.  So if everyone asked for their money back, it would be like a run on the banks, they would run out of money very quickly.  RCL has a much lower burn rate than CCL.

My concern centers around how does cruising start.  What does that look like?

The US may open ports, but what if few others do?  
Will RC stop at ports where there are active covid cases?   and send thousands out on excursions?
A cruise coming from Miami for example will have thousands of people from all over the world, will ports really open up for all those people to get off the ship at the port?
If one person gets sick, will ports start closing to that ship?
If a cruise visits a country with active cases, will the US allow the ship back?
The crew is going to be coming from all over the world, you will need to test everyone of them or isolate them on board for 2 weeks before any passengers get on.

I just struggle to see how cruising is going to return anytime soon and what it looks like..  I still believe that the only way forward is reliable instant testing every time someone boards the ship. 

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1 hour ago, twangster said:

Like many things there are different variations of filing for bankruptcy.  Given this isn't a US corporation US bankruptcy regulations won't apply like they would for a US company.    

Maybe the next episode of the podcast will be an interview with a Liberian bankruptcy lawyer.   @Matt what do you think?  ?

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I have a cruise out of Miami on December 6th on Harmony of the Seas and I’m 75% sure it will happen. Not sure of much else, or where it ultimately will go, but as of now it’s  Coco Cay,  St. Thomas and St. Kitts. Two of the three RCI can’t control but maybe we will go to Coco Cay for three visits ?.

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On 4/22/2020 at 12:02 PM, VACruiser said:

I have a cruise out of Miami on December 6th on Harmony of the Seas and I’m 75% sure it will happen. Not sure of much else, or where it ultimately will go, but as of it’s Coca Cay,  St. Thomas and St. Kitts. Two of the three RCI can’t control but maybe we will go to Coco Cay for three visits ?.

Harmony is in Port Canaveral on December 6...I am looking to go to that cruise instead of my Allure from Miami.  

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