Anyone else getting concerned?
 

That Jetblue is paying 3.8 billion for a company that is now worth 1.5 billion and possibly facing bankruptcy in the future? And if the deal is shot down the break up fee is 400 million? Either way it seems like this may not end well.

it sounds like the perfect time to buy the stock. Turn 13 into 31 in a couple of months.. or you can just put all on Black😎

Are we talking about what the stock is worth, or what the assets are worth. Because those are 2 different things

Spirits plan is/was to have 297 airplanes by 2027. For us to purchase new airplanes, we would spend nearly 30 billion. Granted, planes lose value etc, so the replacement cost isn't very accurate.
there is also the huge cost opirtunity to get their order book and not have to go to the back of the line.
this also doesn't include the cost opportunity of instantly getting the pilots and training center. Even at what we are paying, I think we are getting a phenomenal deal.

I've seen analysts saying they believe Jetblue will negotiate a lower purchase price under the material adverse change clause. So I wouldn't be counting on the $31.

Given the current financing environment, revenue environment, and cost environment, I don’t think jetblue really cares to take on this much debt right now. It’s definitely not a phenomenal deal from a deal valuation standpoint today. A year ago it was an OK deal. They were overpaying then, but it was worth it to allow the F9 merge to fall apart and B6 to more rapidly scale. The landscape has changed. Now, with interest rates high and demand falling, and spirit having all their financial issues, I suspect if B6 management could back out today, they would.

Well I think massive amounts of law suits from the share holders at the time of the vote would ensue as that was agreed upon price to make this deal happen. They might have to put it to another vote for a different price. It would be tough to get done with the DOJ lawsuit only to have it unraveled over a few dollars per share.

Does anyone know for certain what type of interest rate JB is paying on this loan? They secured it years ago, so it seems possible they locked in a low rate when they initially got the loan?

You aren’t buying Spirit because of its current or previous valuation. You are buying Spirit because a Spirit/Frontier merger would have left you alone at the dance without a partner, or as your CEO put it to the board: “would limit any potential major inorganic growth opportunity” and would leave B6 “a smaller and less relevant player in the industry”

And no, Spirit is not anywhere close to bankruptcy.

Yes it would have to be voted on by SAVE shareholders. JetBlue management would be negligent to over pay so badly for Spirit with its current issues and long term path to profitability. The alternative if the deal falls apart though is SAVE falls below $10 and Robin is most likely getting walking papers so both sides have a vested interest in coming to an agreement. Been very interesting watching the January 2024 option’s market these past few weeks.