UAL Asset Sale/Breakup
Drop in United Airlines (UAUA) provides buying opportunity
Posted Aug 16th 2007 12:47PM by Eric Buscemi Filed under: UAL Corp (UAUA), Bargain stocks, Stocks to Buy UAL Corporation (NASDAQ: UAUA), the parent of United Airlines, got beat up pretty good along with the rest of the airline group yesterday. However, investors should not stampede away from this sector, or more specifically, from UAL. As discussed in a Bear Stearns report released yesterday, the airline, which recently emerged from bankruptcy, continues to explore ways to utilize its massive cash hoard of $5 billion to maximize shareholder value, $1 billion of which management believes is excess cash. Also, UAL is seeking ways to unlock value for its Mileage Plus program, a business that generates $800 million per year in revenue and has a large deferred revenue stream which provides some visibility for future revenue. Aeroplan, the Canadian-based loyalty marketing service business that was spun off from Air Canada's holding company, sells for a 60% premium to its former parent and a 200% premium on an enterprise value/EBITDA basis to the pure airline, Air Canada. The Bear report places a $65 price target on UAL, with the asset break-up value of the company going as high as $80. Operational turnaround, huge free cash flow generation and the potential to realize value for the mileage plus business are all cited as reasons that could lead to a considerably higher stock price. ******************************************* To see an analyst talk about breaking the company apart is eye-opening. No airplanes on order Nothing from Tilton about the future other than operational status quo (keep the stock/cash flow up) SFO Maint. Base is for sale Mileage Plus is for sale If I were a UAL employee, merger would be the least of my worries. |
Massive cash hoard? How about giving some of it to the employees who's retirements got robbed? Or repay the amount dumped on the PBGC that all of us taxpayers without retirements get to contribute to?
|
Originally Posted by Low & Slow
(Post 216365)
Drop in United Airlines (UAUA) provides buying opportunity
Posted Aug 16th 2007 12:47PM by Eric Buscemi Filed under: UAL Corp (UAUA), Bargain stocks, Stocks to Buy If I were a UAL employee, merger would be the least of my worries. But you're not. |
Just remember that this stuff has nothing to do with employees or stockholders, but rather how much money the execs can siphon out of a deal. They break up the company and sell it to the devil if they thought they could make a killing.
|
Originally Posted by Wheels up
(Post 216421)
Just remember that this stuff has nothing to do with employees or stockholders, but rather how much money the execs can siphon out of a deal.
|
A different era
There was a time when directors and executives toiled to ensure the success of the franchise and being the best company on the block was the prime directive.
Alas, we are in an era now where it's all about the payout and concern for the enterprise or those in it's employ are not even in the decision tree. You all be careful out there. |
Originally Posted by Low & Slow
(Post 216365)
SFO Maint. Base is for sale
Mileage Plus is for sale If I were a UAL employee, merger would be the least of my worries. As for mileage plus, what is the drawback in selling that unit? If it is more cost effective then should the company not seek to do so? We do not lose the MP pax just the maintenance of the service if I read the article correctly that discussed this a few weeks ago. Blowing air to blow air is not a very intelligent way to produce a post. Why not put some work into the facts, make a good argument and then type. Your method is truly lacking information or supporting statements. On the airplane order issue I am curious about something. What equipment is any carrier buying? The 787 is not flying and if you follow what happened with our 777's you would wait out the first round of a new airplane. Were you even around to remember the problems we had with the -400 when they were new????? The nose gear that would not extend in LAX was a great way to display a new airplane. In fact if you follow the markets I think UAL is in a very good position compared to some other carriers with the bear market appearing to be warming up for a full fledged downturn. Of course I hate to throw facts at your emotion and hope to dissuade your mindset. |
Originally Posted by Slow
(Post 216365)
)
If I were a UAL employee, merger would be the least of my worries. |
Originally Posted by HSLD
(Post 216444)
That's exactly right, the board's job is to return value to the shareholders. Shareholder value and labor relations are not mutually exclusive.
|
Business As Usual
Funny how quickly a company can go from being on the verge of liquidation, to having too much money lying around.
UAL, from a financial standpoint, is doing well. The employees know this, and want to recover some lost wages. To keep the inmates from rioting, Tilton/Brace float the idea of being broken apart. Inmates retreat. Business as usual. Thanks for helping out Tilton, monkey boy, we all appreciate it. |
All times are GMT -8. The time now is 12:03 PM. |
User Alert System provided by
Advanced User Tagging v3.3.0 (Lite) -
vBulletin Mods & Addons Copyright © 2024 DragonByte Technologies Ltd.
Website Copyright ©2000 - 2017 MH Sub I, LLC dba Internet Brands