While Some Fracs Are Posting Profits...
01-31-2011, 01:38 PM
#1
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Joined APC: May 2009
Posts: 158
While Some Fracs Are Posting Profits...
This Is Straight Off The Press!
Avantair, Inc. announced that Annual Meeting of Stockholders was held on January 19, 2011. The meeting approved an amendment to the Company's Amended and Restated Certificate of Incorporation to authorize the Board of Directors, at its discretion to, until the next Annual Meeting of Stockholders, (a) effect a reverse stock split of the company's common stock at a reverse split ratio of between 1-for-2 and 1-for-5, which ratio will be selected at the discretion of the Board of Directors, and (b) decrease the number of authorized shares of the company's common stock on a basis proportional to the reverse split ratio approved by the Board of Directors.
(From the WWW)
A company generally only institutes a reverse split when they are in need of a positive change. It is done to boost its stock's market price and attract investors.
As an investor it is important to understand the ins and outs of stock splits, especially those stock splits that are done in reverse. A reverse stock split will reduce the number of outstanding shares, and while occasionally this is done to simplify things, often a company will declare reverse splits to avoid being de-listed.
What does it mean to be de-listed, and why would that induce a reverse stock split? Being de-listed can be devastating to a company, and thus to avoid it, and buy some time to get things spiraling upward instead of down, reverse stock splits occur.
In the stock market there are a few major stock exchanges, like the New York Stock Exchange. So, if a company can list their security with one of these exchanges, this is really good, as it is like publicity. Being listed with a major stock exchange means more liquidity for shareholders, which is huge. However, companies have to meet several criteria in order to be put on the list, and must maintain them to stay on the list. So, being de-listed means they no longer meet the criteria and are taken off the list-a huge, sometimes fatal blow to a company.
Another reason a company may declare a reverse stock split is to hide a declining stock price.
So, when you see a reverse stock split, really do your research before deciding to invest in that stock.
Avantair, Inc. announced that Annual Meeting of Stockholders was held on January 19, 2011. The meeting approved an amendment to the Company's Amended and Restated Certificate of Incorporation to authorize the Board of Directors, at its discretion to, until the next Annual Meeting of Stockholders, (a) effect a reverse stock split of the company's common stock at a reverse split ratio of between 1-for-2 and 1-for-5, which ratio will be selected at the discretion of the Board of Directors, and (b) decrease the number of authorized shares of the company's common stock on a basis proportional to the reverse split ratio approved by the Board of Directors.
(From the WWW)
A company generally only institutes a reverse split when they are in need of a positive change. It is done to boost its stock's market price and attract investors.
As an investor it is important to understand the ins and outs of stock splits, especially those stock splits that are done in reverse. A reverse stock split will reduce the number of outstanding shares, and while occasionally this is done to simplify things, often a company will declare reverse splits to avoid being de-listed.
What does it mean to be de-listed, and why would that induce a reverse stock split? Being de-listed can be devastating to a company, and thus to avoid it, and buy some time to get things spiraling upward instead of down, reverse stock splits occur.
In the stock market there are a few major stock exchanges, like the New York Stock Exchange. So, if a company can list their security with one of these exchanges, this is really good, as it is like publicity. Being listed with a major stock exchange means more liquidity for shareholders, which is huge. However, companies have to meet several criteria in order to be put on the list, and must maintain them to stay on the list. So, being de-listed means they no longer meet the criteria and are taken off the list-a huge, sometimes fatal blow to a company.
Another reason a company may declare a reverse stock split is to hide a declining stock price.
So, when you see a reverse stock split, really do your research before deciding to invest in that stock.
02-10-2011, 09:47 PM
#2
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Joined APC: Nov 2010
Posts: 11
They can't get "de-listed" as they aren't listed on the NYSE or NASDAQ in the first place. This could just be an attempt to get listed. AAIR is currently only traded on the OTC.BB (wiki), so it would be good publicity, as your post pointed out, to get listed on something other than the "penny" stock board. From my limited knowledge and research, staying above $1 for a certain period of time is typically a requirement to be considered for one of the major exchanges. AAIR hasn't been that low for just over 2 years, and even then was only below $1 for about 2 months.
AAIR Stock Price
Article about NASDAQ delisting
This one mentions using a reverse stock split specifically to avoid being de-listed as being "fishy," but they are already above the minimums...
Article about NYSE relaxing their cut-off about the time AAIR would've needed it
AAIR Stock Price
Article about NASDAQ delisting
This one mentions using a reverse stock split specifically to avoid being de-listed as being "fishy," but they are already above the minimums...
Article about NYSE relaxing their cut-off about the time AAIR would've needed it
02-11-2011, 04:26 AM
#3
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Joined APC: Apr 2007
Position: F/O- G-V/550
Posts: 1,163
I found this article. They did report an operating loss, but I don't think their numbers are that bad. They're red, but nothing scary. They're attributing the loss to "maintenance issues due an increase in fleet size and the company's decision to accelerate normal fleet maintenance costs in response to stronger sales".
- Operating loss of ($2.9) million and an EBITDA loss of ($1.6) million, compared with an operating profit of $1.4 million and EBITDA profit of $2.8 million for the second quarter of fiscal 2010. Included in 2010 operating profit and EBITDA is a $0.8 million non-recurring gain on the sale of core aircraft. The 2011 loss is attributed to a $2.8 million increase in maintenance expense as a result of an increase in fleet size and the Company's strategic decision to accelerate normal fleet maintenance costs in response to stronger sales, and an increase in fractional flight hours flown over standard fractional flight. The accelerated maintenance is now completed and the company expects reduced operating expenses in future periods.
- Total revenue increased to $36.6 million, up 2% year-over-year, as a result of increased flight hour time card flight hours, Axis Club Memberships and other revenues, partially offset by a decrease in the amortized recognition of fractional share sale revenue.
- Flight hour cards sold increased 62% to 162 in the second quarter of fiscal 2011 from 100 flight hour cards sold during the second quarter of fiscal 2010.
- Six new fractional shares and 14 new Axis Club Memberships were sold in the second quarter of fiscal 2011.
- Revenue generating flight hours flown reached a new record of 11,061 hours. This is a 13% increase compared with 9,770 hours in the second quarter of fiscal 2010, and a 6% increase compared with 10,418 hours in the first quarter of fiscal 2011.
- Fractional owner hours flown increased to a new record of 8,671 up from 8,271 in the second quarter of fiscal 2010, and 8,498 in the first quarter of fiscal 2011.
- Net loss attributable to common stockholders was ($4.4) million, or ($0.17) per share, based on 26.4 million weighted-average shares outstanding. This compares with a net loss attributable to common stockholders of ($0.6) million, or ($0.02) per share, based on 24.6 million weighted average shares outstanding for the second quarter of fiscal 2010.
- Retired approximately $6.9 million in short- and long-term debt.
- Cash flow from operations for the six months ended December 31, 2010 was $3.3 million.
02-16-2011, 07:24 AM
#4
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Joined APC: May 2009
Posts: 158
That is very true. They don't meet the criteria to be listed on any major stock exchange, thus they can't be de-listed from something they never were listed on in the first place. There are ony a few reasons for a company to do a reverse stock split. I suspect it was the very first reason that I quoted. Wouldn't your stock be more attractive to an investor if it were listed at $10 per share verses $2.50 per share?
They just released their 2nd quarter financial statement last week They posted another loss, this time it was $4,814,309. It was very similar last quarter, and they used the same reasoning then......early maintenance....lol. They have been around since 2003 and have lost money the entire time (8 straight years). Maybe it's time to make the pilots work 9-5 and make them buy their own airline tickets to work....lol. (That was just a joke for those without a sense of humor). Or......maybe a change in management?
For those guys who don't think this information should be posted.....it is on the Avantair website.
They just released their 2nd quarter financial statement last week They posted another loss, this time it was $4,814,309. It was very similar last quarter, and they used the same reasoning then......early maintenance....lol. They have been around since 2003 and have lost money the entire time (8 straight years). Maybe it's time to make the pilots work 9-5 and make them buy their own airline tickets to work....lol. (That was just a joke for those without a sense of humor). Or......maybe a change in management?
For those guys who don't think this information should be posted.....it is on the Avantair website.
03-01-2011, 04:41 PM
#6
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Joined APC: Oct 2006
Position: Cessna 210 Turbo
Posts: 50
Avantair, and I happen to fly out of their FBO at KCDW (nice operation), is OTCQB, this is next to the highest level of over the counter stocks, which means they are fully reporting as to financials and other required reports. De-listing is not an issue here for doing an "R/S".
They closed today at $2.30 a share, so do the math if it is 1 for 2 or 1 for 5 or whatever in between. Such a reverse split will make them able to uplist and might even, though not likely, attract institutional investors.
They currently have outstanding shares of 26.39 million and a float of 13.30 million (if my source is correct). The float is what is available in the market to be traded, the other shares are restricted and cannot be traded.
Currently their market cap is $60.7 million.
You can check it out here: Avantair Stock Quote AAIR (OTCBB)
Frankly, and regardless of how it might help the company, I am not a fan of reverse splits, and neither are many investors. Also, right now there is little or no short interest in the stock, but this could change. Shorters often like reverse splits, as rarely will the price be driven up after the split (aside from the price resulting from the split). Thus you might have some short the stock while other investors decide to bail out. The greater the ratio of the reverse split the more likely this will be. Include investors looking at the fundamentals and this could be a good stock to short, provided you can find the shares to short.
Otherwise, with a stock and company like this it is what it is. I'd only be concerned if I held the stock. Otherwise, once the split takes place, if you don't own the stock, short it; you'll probably do well. If you just work for the company and own no stock I would not be concerned.
Hopefully this works out well for the company in these tough economic times.
They closed today at $2.30 a share, so do the math if it is 1 for 2 or 1 for 5 or whatever in between. Such a reverse split will make them able to uplist and might even, though not likely, attract institutional investors.
They currently have outstanding shares of 26.39 million and a float of 13.30 million (if my source is correct). The float is what is available in the market to be traded, the other shares are restricted and cannot be traded.
Currently their market cap is $60.7 million.
You can check it out here: Avantair Stock Quote AAIR (OTCBB)
Frankly, and regardless of how it might help the company, I am not a fan of reverse splits, and neither are many investors. Also, right now there is little or no short interest in the stock, but this could change. Shorters often like reverse splits, as rarely will the price be driven up after the split (aside from the price resulting from the split). Thus you might have some short the stock while other investors decide to bail out. The greater the ratio of the reverse split the more likely this will be. Include investors looking at the fundamentals and this could be a good stock to short, provided you can find the shares to short.
Otherwise, with a stock and company like this it is what it is. I'd only be concerned if I held the stock. Otherwise, once the split takes place, if you don't own the stock, short it; you'll probably do well. If you just work for the company and own no stock I would not be concerned.
Hopefully this works out well for the company in these tough economic times.
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