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-   -   Amazon Spends $131 Million for Stake in ATSG (https://www.airlinepilotforums.com/cargo/133294-amazon-spends-131-million-stake-atsg.html)

FlyAstarJets 03-08-2021 05:07 PM

Amazon Spends $131 Million for Stake in ATSG
 
Amazon now owns 19.5% of ATSG and can appoint 1 board member.

https://finance.yahoo.com/news/amazo...161447815.html

wjcandee 03-08-2021 08:43 PM

Quote:

Originally Posted by FlyAstarJets (Post 3204503)
Amazon now owns 19.5% of ATSG and can appoint 1 board member.

https://finance.yahoo.com/news/amazo...161447815.html

Amazon had the right to pay that $131 million for the shares and immediately-resell them, which would have yielded about a $270 million profit, as the shares had risen so that the market price of a share today was more than 3 times the price at which the warrants were exercisable. Instead, they say they're planning to hold onto the shares, which makes them ATSG's largest shareholder.

nitefr8dog 03-09-2021 07:31 AM

Quote:

Originally Posted by wjcandee (Post 3204576)
Amazon had the right to pay that $131 million for the shares and immediately-resell them, which would have yielded about a $270 million profit, as the shares had risen so that the market price of a share today was more than 3 times the price at which the warrants were exercisable. Instead, they say they're planning to hold onto the shares, which makes them ATSG's largest shareholder.

Today........

flyboy730 03-09-2021 11:36 AM

Quote:

Originally Posted by nitefr8dog (Post 3204747)
Today........

who else do you see becoming a larger shareholder?

nitefr8dog 03-09-2021 01:57 PM

Quote:

Originally Posted by flyboy730 (Post 3204853)
who else do you see becoming a larger shareholder?

Amazon is the largest shareholder TODAY....after Amazon exercised their Atlas options, they sold some and took the money. Amazon might do the same with ATSG.

Wheelsdock 03-09-2021 05:08 PM

Y’all are missing one key point. If they where going to sell it off they would have done a cashless exercise similar to atlas. They wouldn’t have given ATSG 132 million.

threeighteen 03-09-2021 06:58 PM

Let the whipsaw games begin.

nitefr8dog 03-09-2021 08:41 PM

Quote:

Originally Posted by Wheelsdock (Post 3205002)
Y’all are missing one key point. If they where going to sell it off they would have done a cashless exercise similar to atlas. They wouldn’t have given ATSG 132 million.

So they sell it in 6 mos....

woog315 03-09-2021 10:18 PM

Quote:

Originally Posted by nitefr8dog (Post 3205062)
So they sell it in 6 mos....

I know we are just bloviating here, but if you read the filings it talks about AMZN having to meet certain requirements in order actually hold more than 4.9% of the shares ( the warrants are not shares, but ill assume we all understand that). I would pretty much guarantee that one of those requirements is that they cant flip the shares in a short time frame. They very intentionally kept below 5% with Atlas to avoid having to meet the requirements of the warrants. They did not do the same with ATSG. The warrants (with both ATSG and AAWW) were presumably structured in a way that basically makes amazon either exercise them and exit the position (technically whittle it down to 4.9%) or invest and stay invested for some time frame. They likely wont be selling those shares anytime soon.... but of course anything is possible.

wjcandee 03-09-2021 11:37 PM

Quote:

Originally Posted by woog315 (Post 3205072)
I know we are just bloviating here, but if you read the filings it talks about AMZN having to meet certain requirements in order actually hold more than 4.9% of the shares ( the warrants are not shares, but ill assume we all understand that). I would pretty much guarantee that one of those requirements is that they cant flip the shares in a short time frame. They very intentionally kept below 5% with Atlas to avoid having to meet the requirements of the warrants. They did not do the same with ATSG. The warrants (with both ATSG and AAWW) were presumably structured in a way that basically makes amazon either exercise them and exit the position (technically whittle it down to 4.9%) or invest and stay invested for some time frame. They likely wont be selling those shares anytime soon.... but of course anything is possible.

I think (FWIW) that those are good observations.

Amazon had the same kind of 4.9 percent feature with ATSG, subject to notice by Amazon to adjust that number. In the notice of exercise, Amazon bumped the percentage it can own to 19.999%, and ended up acquiring in total 19-something percent. It also agreed with ATSG that if ATSG does any share-repurchases (with limited exceptions), it will, at Amazon's option, acquire shares proportionally from Amazon to keep the Amazon percentage of ownership under that threshold (i.e. if they buy back shares such that Amazon's stake would suddenly be over the threshold, Amazon can force them to buy some of the shares from Amazon so Amazon stays under that level).

Amazon did do a cashless exercise for a portion of the shares it acquired. It fully-exercised the one warrant on a cashless basis, and split the other warrant between a cashless and cash exercise. What if anything that reveals about its intentions, I don't know. I thought I read somewhere that Amazon had announced that it intended to hold the shares for some time, but I don't see anything in the SEC filing that says that, and I can't seem to find the report I read that said that. (And reporters are often wrong.) SEC filing: https://otp.tools.investis.com/clien...81&Index=10000

Note that the timing of all of this was likely substantially-influenced by the fact that some or all of these warrants would have expired around now if they hadn't been exercised.


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