Investors React as Carnival Issues Equity, but Offering Does Not Imply a Slowdown in Demand

No-moat Carnival’s shares tumbled more than 10% in response to another $1 billion equity issuance. Shares closed around $11 prior to the July 20 announcement, but, as the equity sale was priced at $9.95, the market price dropped toward that price point. Carnival expects to use the proceeds for general corporate purposes but also alluded to its use in paying down debt coming due in 2023. Per its last quarterly filing, Carnival has $2.8 billion in financing maturing in 2023, implying the capital raise would allow for a partial paydown and refinancing of this balance.