Originally Posted by
panpanpan
So the fact that the market is essentially pricing in that the deal will be rejected and that Spirit will possibly face bankruptcy is not a factor? I think it’s very relevant.
If you think these stock prices are “priced in” that a merger will be rejected, think again. Estimates from firms have NK between $4-$5 if it fails. So this is far from how bad it can get.
But if you think market cap represents the value one pays for an airline, that’s incorrect. All airlines were rock bottom pricing in Covid, you think the legacy airlines were worth that at the time and now higher now?
You can’t just take an elementary approach to valuation, based on a number at the bottom of your Google finance feed.