Originally Posted by
baseball
I am fairly certain that all investors are in it for the money. And all big investors are in it for the big money. All Institutional investors are in it for insane amounts of money.
They own both a piece of Delta and a piece of United strictly because of two factors: one United route network and two Delta's management team. For United they believe the route network is very strong and would be a formidable force to reckon with if higher PRASM's can be realized off those routes. On the Delta front, they know the top 8 managers from Gordon Bethune's turn-a-round of Continental are key decision makers at DAL and they are betting they will keep that airline efficient and competitive.
Since they aren't going "all in" on one airline over another, they are simply content to make a butt-load of cash from both. Too risky putting all their eggs in one airline basket.
If they can be successful in putting up candidates for each board they will be more likely to invest more money in both. This gives them "hedges" against their cash positions in being comfortable with the decision-making skills of their candidates.
It's sort of like Obama putting up an ultra liberal judge for Supreme Court. Obama doesn't have to wonder how that person will rule on abortion or other liberal special interests.
hedge funds and other institutional investment firms seem to do this allot at publicly traded companies when large sums of money are in play.
Baseball, the key players that turned around Continental are Brenneman and Bonderman. Neither are at Delta. Brenneman's Chairman of CCMP Capital. Bonderman's still a partner at TPG Capital. Bethune's performance at Aloha proves he's not the talent.
And let's not forget that United and Delta are tremendously more complicated beasts than Continental ever was.
As far as diversifying their bets, that's not true of Altimeter Capital. They've now got ~40% of their investments in United Airlines. Sure there's the other 60% mixed among other companies, but Brad Gerstner's making a huge bet on United. Here's a post where I've documented PAR and Altimeter's position in United:
Originally Posted by
Andy
I dug through Altimeter and PAR's SEC filings and have compiled a history of their holdings in United. I've only gone back as far as 12/31/2011. Here are the links to the SEC filings:
https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001541617&type=&dateb =&owner=include&count=100
https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001051359&owner=inclu de&count=40&hidefilings=0
https://www.sec.gov/cgi-bin/browse-edgar?CIK=0001066867&action=getcompany
Altimeter Capital Management, LP
12/31/2011 2,359,108 SH
3/31/2012 1,406,553 SH (remained same until 12/31/2012)
12/31/2012 178,302 SH
3/31/2013 514,502 SH
6/30/2013 2,195,145 SH
9/30/2013 2,895,745 SH
12/31/2013 1,980,538 SH
3/31/2014 2,053,621 SH
6/30/2014 2,549,680 SH
9/30/2014 2,866,645 SH
12/31/2014 4,812,903 SH
3/31/2015 4,480,179 SH
6/30/2015 4,748,637 SH
9/30/2015 9,300,000 SH
12/31/2015 10,650,000 SH
3/8/2016 11,509,268 SH
PAR Capital Management Inc/PAR Investment Partners LP
No shares owned until 9/30/2014 filing
9/30/2014 800,000 SH
12/31/2014 1,805,000 SH
3/31/2015 1,885,000 SH
6/30/2015 2,642,632 SH
9/30/2015 5,380,000 SH
12/31/2015 6,423,600 SH
3/8/2016 14,389,711 SH
Based on the purchase dates, I suspect that this scheme has been planned since late 2014.
If you dig through Altimeter's quarterly filings, you'll see the size each holding represents within each fund.
13F Manager Holdings - Altimeter Capital Management, LLC
Brad Gerstner of Altimeter likes to make outsized bets with OPM (Other Peoples' Money). If his hedge fund blows up, he can close its doors and start over. If the bets pay off, he collects outsized management fees.