Shares of Carnival Corp. rose sharply after Saudi Arabia's Public Investment Fund announced it had acquired an 8.2% stake in the world's largest cruise operator.
Carnival shares surged as much as 18% on Monday in New York after the fund disclosed in a filing that it owns 43.5 million shares of the cruise line. At the close of last week, the stake was worth $369.4 million.
The Saudis are getting a bargain price for Carnival, which is down 81% this year, as the cruise industry faces unprecedented risks. This Public Investment Fund has previously invested overseas, including stakes in Uber Technologies Inc., Tesla Inc., and SoftBank Group Corp.'s Vision Fund. But it wasn't known for making investments in declining companies.
Now, it owns a portion of the dominant cruise operator, with a fleet of more than 100 ships, which is at a complete standstill due to the COVID-19 crisis.
The cruise industry was left out of the US $2.2 trillion stimulus package, which excluded non-US companies. Although headquartered in Miami, Carnival is technically incorporated in Panama.
