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Saudi Fund’s Bargain Buy of Carnival May Turn Out to Be Pricey

Saudi Fund’s Bargain Buy of Carnival May Turn Out to Be Pricey

(Bloomberg) -- Even after a 20% jump in Carnival Corp. shares, Saudi Arabia’s bet on the world’s biggest cruise operator is still in the red.

The kingdom’s sovereign wealth fund had built an 8.2% stake in Carnival by March 26, when the stock closed at $17.82, valuing the holding at about $775 million. The shares ended the day Monday, when the Saudi purchase was disclosed, at $10.21.

Carnival also announced a stock offering on April 1 that priced new shares at $8 each.

Saudi Fund’s Bargain Buy of Carnival May Turn Out to Be Pricey

Saudi Arabia’s $320 billion sovereign wealth fund, run by Governor Yasir Al-Rumayyan and controlled by Crown Prince Mohammed bin Salman, has made a series of bold investments in recent years.

It paid almost $49 a share for a stake in Uber Technologies Inc. in 2017, a level the company hadn’t reached since. Share are now trading at about $26. The fund also built a roughly $2 billion stake in Elon Musk’s Tesla Inc. in 2018 and sold almost all of the shares toward the end of 2019, missing out on a huge rally earlier this year.

©2020 Bloomberg L.P.