my understanding is that this would not be a realisitic threat. im not a finance guy but since indigo holds 80 something % of the stock, a hostile takeover would not be possible.

if anyone knows more about this stuff, please correct me if im wrong

 

sorry but that is incorrect. They might own 80% but they still have a fiduciary duty to their shareholders. If someone came along and offered to buy the company for $x per share indigo couldn’t just say no. The 20% could and would sue and they would win.

 

Perhaps you're right but part of me thinks you have to WORK at being this bad...

Keep in mind, the fuel prices are up for ALL airlines. If it were a contributing factor, then ALL airline stocks would be tanking.

 

agree with this also

everyone should be suffering equally. does not seem the case tho

 

First of all, it is HIGHLY unlikely the stock reaches absolute nadir. It may go low enough that it is essentially worthless but zero RARELY happens w/o the company completely imploding into a Ch 7. Therefore, if anyone (investment bank probably) wanted to own the remaining 20% of the company, they'd have to convince everyone who had stock to sell to them (most likely at a price higher than current value). If Franke saw this coming, he'd just offer a few pennies more and buy it himself. Nevertheless, if the bank managed that, a lawsuit would take years (and tons of money).

This would be a very rare occurrence.

Bottom line - this current financials of F9 are highly unusual. The company made money in the 2nd qtr. It posted a 85% load factor. Company financials boasted $780M unrestricted cash. Earnings per share increased. Yet the stock price has continued to fall significantly. Stock prices are mostly a factor of investor trust/evaluation of how well the company WILL DO in the future. I, by no means, am any kind of market guru but this is not a common thing. History shows that stock price decline this sharp signifies either the company is in serious financial trouble or some other (usually industry wide issue/black swan) event. On July 10th, 2023, the stock price hit a relative high of about $10.50 (just for reference, the IPO price was $20). Today it's at $4.65. Even though, in the 2nd qtr the company made $71M (9.1% profit margin). Q3 will probably boast a profit as well.

The obvious phenomenon we're experiencing is that the company should be making MUCH more. Investors KNOW this (they're not stupid) as the investor call Q&A is ridiculous. People are still bailing at a loss. Even BB sold off a bunch and that formulates his salary - if he thought it would rebound, then why sell? He's smart enough to know his selling will spark negative speculation. Even better, why not just do those things that should make more $ that seem so obvious?

For instance, pricing. Our average ticket price for Q2 in 2022 was $64. This Q2 was $48. We lowered our price by an average of $16 even though air travel demand was up significantly over last year (granted some of this demand increase was international but certainly not all of it). Another area is fuel. We spent $335M on fuel in Q2 of 2022 but only $244M this past qtr (a $91M difference). All while our ancillary revenue went up during the period. I get that there are several factors which all contribute to the bottom line but 0ther airlines are making double digit profit margins and we "only" made 9%. THAT is the startling issue and is why the stock price is down in what has been one of the greatest times for profit in the airline industry. BB is supposed to be someone who can make $ in just about any market. He's been the CEO for how many years now? He can't find a way to maximize profits?

I think he can but just "isn't." It all seems too obvious to just be incompetence.

 

https://www.reuters.com/business/aer...it-2023-09-21/

Frontier CEO Barry Biffle said while he will not invest in long-haul jets, he has been struck by a greater desire among leisure travelers to pay for first-class seats on domestic flights.

Frontier is watching the trend "very carefully" and would consider adding premium seats if it lasts for multiple years, he said.

"If people are really willing to pay that much for a premium, maybe there is an opportunity," Biffle told Reuters.

 

Under any other circumstance I would think that’s a good menu item to add to a ULCC. But given the horrid nature of gate agents, customer service and on time arrivals at F9, I’d say it’s a waste of money to add first class seating.

People aren’t gonna pay extra just to get punched in the gut and arrive late anyway.

 

I have been curious if NK sees a benefit from them to make it worth it or not. That and wifi were a curiosity for the old merger plans.

 

The fact that we don't have wifi is a mystery to me. It could be COMPLETELY a pass through if not slight money maker. People LOVE wifi and will pay a few bucks for it - especially on flights from Atl to SFO or Las to Cle.

Again, simple stuff like this, which could be included already on the aircraft at delivery, are easy money makers.

 

Barry will be gone by then...