What happened

Shares of cruise stocks Carnival (CCL 0.12%) (CUK 0.17%), Norwegian Cruise Line Holdings (NCLH 0.24%), and Royal Caribbean (RCL -1.54%) were all falling in midday trading Monday, with Carnival down 6.7%, Norwegian falling 5.7%, and Royal Caribbean off 6.3% on a day when no major index was down more than a fraction of a percentage point.

So what

Carnival announced it was selling up to $500 million worth of stock, which it mostly intends to use to repurchase shares trading in the U.K., but also for other corporate purposes. The cruise ship operator has had to raise of $2.5 billion to remain afloat while the industry was stuck in a lockdown for over a year, jeopardizing the viability of all operators.

Wave striking the bow of a ship

Image source: Getty Images.

While cruise lines have now been largely given the go-ahead to resume sailing out of the U.S., albeit with limited capacity, they're expected to continue burning cash until normalcy can return, arguably not until late 2022 or 2023.

Last week, Royal Caribbean set sail from Fort Lauderdale, the first cruise out of the U.S. since the pandemic halt began. But two unvaccinated passengers under 16 years of age tested positive for COVID-19. The cruise operator notes 92% of its guests are vaccinated, and those who are not are under 16. All of its crew members are vaccinated as well, it says.

Now what

More debt, more dilution, and lingering coronavirus news is likely weighing on all three cruise lines, including Norwegian, which -- as the industry's smallest operator -- can't afford to have its sailing plans disrupted.

The industry will undoubtedly remain in choppy waters for some time, and bad news for one will likely hurt them all.