“The cruise industry is fu$ked,” the voice of a worried CEO echoed through a Zoom meeting Friday morning.
“What in the hell are we going to do?”
The cruise industry has officially cratered. Bookings have dropped to levels never seen. Cruise ship owners have seen the equity in their assets fall well below tangible book value. Forced bankruptcy for the entire industry is around the corner.
“Old people are just not willing to take the risk of potentially getting COVID-19,” Jason Stanley, Bank of America equity analyst stated.
But hope is not lost.
One small cruise company has figured out a way to make money in this environment and avoid bankruptcy.
“We have decided to convert all our ships to oil tankers,” Arnold Donald, CEO of Carnival Cruise stated.
The news of the potential retrograde conversion comes during a time where shipping companies have seen their day rates explode from a low of $15,000 per day to over $200,000 per day.
“It’s absolutely insane how much the oil tankers are making storing fossil fuels,” Jason Stanley of Bank of America stated.
“There is too much oil being produced and not enough storage. Anyone who can offer any incremental storage is going to walk away with a ton of money.”
Converting cruise ships into oil tankers is exactly what Carnival Cruise is offering.
“We can convert our cruise ships into oil tankers with relatively little capex and in a few days,” the Arnold Donald went on.
“Our cruise ships can store double the amount of oil a traditional oil tanker can hold and we will undercut the competition’s day rate by $100,000/day.”
Carnival Cruise has already signed hundreds of take-or-pay contracts to store incremental oil produced in the Permian, Midland and Delaware basins. It’s also rumored Carnival plans to switch their headquarters to Greece, implement unhealthy corporate governance concerns – such as related party transactions and multiple classes of stock – and start joint ventures with thousands of small oil tanker companies across the world so no one can understand their financials.
“We want to do this right,” the Arnold Donald stated.
“If we are going to become an oil tanker company its time we start doing business like these sleaze bags.”
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