Originally Posted by
crazyjaydawg
This is very interesting to me. With a $10B debt target and $40B of assets, that’s quickly approaching the $29.5B market cap that is DAL.
I know that they really don’t want to have total equity exceed market cap otherwise the airline becomes a target of takeover (likely hostile). If the stock price doesn’t start moving upwards, then I bet more debt is taken on for buybacks or dividends.
I understand the premiss but the Gordon Geko scenario requires the dismantling to exceed the profits as an ongoing concern or you just invest in the equity and enjoy the returns. That usually requires an inflationary environment that gives additional value to the used assets and the inability to take on debt. The hostile takeover is more hollywood than wallstreet.