Carnival Announces $1 Billion Stock Deal, Shares Sink

Options traders are blasting the security in response

Digital Content Manager
Jul 21, 2022 at 10:41 AM
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Carnival Corp (NYSE:CCL) is down 13.2% to trade at $9.64 at last check, after the cruise operator announced a stock offering, pricing the sale of 102 million shares at $9.95 per share. The net proceeds of the roughly $1 billion raised will be used for "general corporate purposes," and possibly addressing its 2023 debt maturities. 

Options traders are already blasting the equity. So far, 75,000 puts and 50,000 calls have already crossed the tape, which is three times what is typically seen at this point. The most popular contract is the October 7.50 put, followed by the 10 put in the same monthly series.

The brokerage bunch is bearish on Carnival stock, with 11 of the 14 analysts in question calling it a tepid "hold" or worse. Meanwhile, shorts have been piling on CCL, with short interest up 8.1% in the last two reporting periods. The 124.22 million shares sold short now make up 13.7% of the stock's available float.

Short-term options traders have been firmly pessimistic towards Carnival stock as well. This is per its Schaeffer's put/call open interest ratio (SOIR) of 1.61, which sits higher than 97% of readings from the last 12 months. This means these traders have rarely been more put-biased.

The security's latest rally off its June 30, roughly two-year low of $8.10 yesterday lost steam at the $11 region, which rejected another surge before that late June trough. Meanwhile, the descending 50-day moving average has been pressuring shares lower since April. Year-to-date, CCL is down 52.1%.


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