Stock market investors continued to worry about the possible economic impact of the coronavirus pandemic on Thursday, but the effect on the stock market has not been as great as many would have thought. the Dow Jones Industrial Average (DJINDICES: ^ DJI), S&P 500 (SNPINDEX: ^ SPX)and Nasdaq compound They fell most of the day, but the indices managed to close their session lows.
Stock market today
|
Index |
Percent change (decrease) |
Point change |
|---|---|---|
|
Dow |
(0.50%) |
(135.39) |
|
S&P 500 |
(0.34%) |
(10.99) |
|
Nasdaq compound |
(0.73%) |
(76.66) |
Data source: Yahoo! Finance.
Part of the reason for the uncertainty among market participants is the variety of opinions investors have on different stocks. Norwegian Cruise Line Holdings (NASDAQ: NCLH) it gave more ground today because once again it had to resort to the capital markets to raise money, and closed 15.6%. However, the space tourism business Virgin Galactic Holdings (NYSE: SPCE) jumped to the news that he has brought in a new executive to carry him up and up, ending Thursday with a 13.5% gain
Norwegian continues to drink water
Norwegian Cruise Line shares fell double-digit percentages for most of Thursday. The cruise line operator has been under pressure for some time, and today he took costly steps to try to shore up his finances once again.
Norwegian will sell $ 250 million in shares through a secondary offering of shares. The company will use the proceeds for general corporate purposes, which at this point generally means covering fixed costs while unable to navigate its ships.
Image source: Norwegian Cruise Line.
At the same time, the Norwegian subsidiary NCL will sell debt to raise another $ 925 million. Of that, $ 675 million will be through a public offering of six-year notes, while another $ 250 million will come from a private placement of exchangeable five-year notes. That second agreement allows bondholders to convert their promissory notes into shares that eventually translate into Norwegian shares. Proceeds will go toward first paying off a $ 675 million revolving line of credit, and the remaining funds will be used for general corporate purposes.
Investors fear dilution, which explains why stocks have fallen. Also, with high interest rates on debt, Norwegian could have a hard time with future interest payments. However, the company is fighting for its life right now, and that justifies the extreme means necessary to raise capital.
Virgin Galactic heads higher
Meanwhile, Virgin Galactic shares rose double-digit percentages on Thursday. The company made a move in the corporate suite that could indicate a dramatic change in its outlook.
Current Virgin Galactic CEO George Whitesides will step down as CEO on July 20 and take on the new role of space director, with the job of developing future business opportunities such as hypersonic business travel and orbital space travel.
Instead Disney (NYSE: DIS) Executive Michael Colglazier will take over as CEO. Colglazier has been a leader in the Disney Parks International division, with responsibility for the properties and operations of international parks and resorts. That experience will be especially important, because Virgin Galactic has realized that customers will be happier if they get a full pre-flight experience for their six-figure fare along with the short space flight.
Investors like the idea of making Virgin’s Spaceport America a destination attraction for space lovers (even those who can’t afford a real flight right now). If Colglazier can drive that growth initiative, it could do wonders for Virgin Galactic’s vision for the future.
