Royal Caribbean’s stock drops after offering of $500 million in stock, and $500 million in convertible debt

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Shares of Royal Caribbean Group dropped 5.5% in premarket trading Tuesday after the cruise operator said it has commenced a public offering of $500 million worth of common stock. Based on Monday’s stock closing price of $69.83, that would represent about 7.16 million shares, or about 3.3% of the shares outstanding. The company has granted the underwriters of the offering options to buy an additional $75 million worth of shares to cover overallotments. Royal Caribbean expects to use the proceeds from the offering for general corporate purposes. The company said it has also commenced a private offering of $500 million worth of senior convertible notes due 2023. The stock has tumbled 47.7% year to date through Monday, while the S&P 500 has gained 9.4%.
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