A retail stampede of Robin Hood traders has been relentlessly buying the dip of Carnival Corp shares as coronavirus decimated the travel and tourism industry.
Shares of Carnival crashed 85% (51.94 to 7.97) from mid-January through early April. During the 51 session plunge, Robin Hood users piled into the stock in the sub 20 range, with the number of users holding shares increasing from 4,450 users (in mid-January) to 469,200 (June 3), a 105x increase.
This ludicrous and relentless euphoria to BTFD has been spawned by central banks and ingrained into a generation of retail traders. Now betting the cruise ship industry will reopen this summer, and a V-shaped recovery would be seen in the near term.
However, Morgan Stanley poured cold water on this with downgrades across the cruise ship industry on Wednesday. The industry is royally screwed for several years, and a lot must go right before sails revert to 2019 activity -- something that won't happen this year or next.
While Robin Hood traders piled into Carnival (since April 1, shares have risen from 8.02 to 17.65, or +120%), thinking the worst is over for the industry and smooth sail from here, well, the cruise ship operator released disappointing news of extending the suspension of some of its lines:
"Carnival Corp's Princess Cruises on Thursday extended the suspension of some of its voyages in Australia, Canada and Taiwan as cruise ports around the world remain shut due to the coronavirus crisis.
"The company said it has extended the delay of operations on all cruises sailing in and out of Australia through mid-September on the Sea Princess, Majestic Princess, Sun Princess and Sapphire Princess," reported Reuters.
Trapping Robin Hood traders, news of the suspension has resulted in a 2% slide premarket.
And it's not just cruise ship companies Robin Hood traders have piled into. We noted users have been buying HTZ, even though the company has sought bankruptcy protection.
The insanity continued when President/CEO of Bianco Research Jim Bianco recently pointed out Robin Hood users panic bought airlines as Warren Buffet dumped.
This week Buffett said he sold his airlines.— Jim Bianco (@biancoresearch) May 8, 2020
At Robinhood, retail piled into "JETS"
Held by Robinhood accounts
#5 AAL (American) 500,642 accts
#6 DAL (Delta) 463,007
#16 BA (Boeing) 252,883
#18 UAL (United) 248,559
#39 JBLU (Jet Blue) 142,272
#41 LUV (Southwest) 141,746 pic.twitter.com/XkNBZ5FdtF
Robinhood millennial users day trading the pandemic and social unrest are buying everything under the sun, hoping that Powell will have their back.