dontsurf

this is the part that is just completely false. not one shred of this is true. you guys act like i'm thinking you're stupid or something, but that's not it. this is just ignorance of how the markets work. 99.9% of the world doesn't understand it, so i don't blame you. but i also know that most people that i know of don't go around spouting off stuff that they pass off as "fact", when it is actually 100% wrong.

supply and demand is a great economic concept. but that concept as normally understood with finite commodities has nothing to do with the stock market. taking shares off the market through a buyback DOES NOT automatically increase demand. shares of stock are not like barrels or oil or bales of wheat or something. there is not a guy out there selling these shares that can base what he sells them on what the "demand" out there is. the only way "demand" increases is the market has to think the stock is undervalued; that is to say that they think the company's sales or prospects or strategic plan indicates the company is worth more than what it is valued at today. of course, a stock buyback for the right reasons can indicate to the street that the company has something big coming up, or their new management is on a better track than the old, or whatever, and it can certainly stimulate an uptick in the stock price. but no one that knows what they are doing sits around looking for stock buybacks, looking at nothing else (ratios, strategic direction of the company, heck even non-fundamental aspects of that stock's trading, like support levels, etc.) and blindly values such stocks higher. it just doesn't happen. well, not by professionals anyway. if that is your trading strategy, then good luck. there's a reason the house always comes out ahead.

Airsupport

That is a direct quote from the article. Like i said in the post before yours i don't believe that to be true. Obviously a company that doesn't have the trust of the investors will not do well if they were to attempt a stock repurchase. All they would have to show for it, is a bunch of useless stock on hand.

I do believe skywest is doing this however to increase their value. Their announcement came on a day of heavy market wide selling while skywest was still moving upward. Why not do it.. If i had 500,000 shares of skywest and could increase it by just 2 dollars simply by using cash on hand then why not?

dontsurf

oh really?


you're 100% right about that. (the part about not having to do it for a living to be good at it. believe me, i worked with many people who DID do it for a living and did horribly. and i have met many people with 6th grade educations who wouldn't know a series 7 from a sand crab who were multi-millionaires due to their ability to understand subtleties in the markets.) and yes, i am happy to have a good discussion too. i am not all huffed up, i just hate misinformation going out there. skywest buying back stock did not CAUSE the stock price to go up. that just isn't true. did they buy back stock? yes. did the price go up? yes. is it 100% flat out simplistic causation? no, it's not. if the street sees the buyback as a good thing by digging a little deeper into the company's position, strategy, etc., then they will value the stock higher. that's all. in that respect, it is very simple.

and again, my point still stands about market makers and "supply and demand". i just hate to think that other people reading what you guys have posted will really think that's how the stock market works. sorry, i just had to set people straight on that.

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For the record, I don’t think stock buy backs are "evil". With my limited or broad perspective depending what your looking at, I believe that money could In part be used to invest in the infrastructure of skyw namely cola for employees. With skyw’s huge turnover I think skyw is being a bit short sited. Sure that’s the business model; guess the status quo wins...

Airsupport

Are you disagreeing with this statement?

Like I said in my previous post, that was a quote from the article.

Also a stock buy back is a great catalyst in getting things moving. All this time skywest stock has been stagnant. Even with all the announcements about united easing up on their agreement, getting rid of Brasilia’s for rjs, Midwest flying. All of that and skywests stock still wasn't above its 52 week average. Then the announcement came for repurchase. The repurchase along with more planes coming on board, better revenue, and good performance are what are driving the price up. The stock buy back gave it a nice kick-start.

dontsurf

definitely part of the reason. the other reason that is a little more complicated, beyond simple share price concepts, is how a company is sitting in its industry, how its ratios are compared to its peers, etc. and how that relates to that company's attractiveness to buyout shops, private equity firms, or even other airlines (since we are an airline). and i know absolutely positively that is a big part of the reason that skywest inc. keeps buying back stock. they DO NOT want their cash on hand to make them too attractive to someone that might want to buy them. obviously, if someone really wants to buy them, then they will anyway. but someplace like cerebus (just an example off the top of my head, and my personal opinion is that it would be private shops like them who would be looking, as opposed to another airline. i have no real proof of what jerry might be avoiding) who is looking around for a good buy will be much more interested in a place with all the cash on hand, as oppossed to a place that took that cash and bought back some shares. of course, the dispostion of those shares after the buyback is important also. but i won't get into that here.

point being that the strategic value of buying back the stock to get rid of outstanding cash to look less attractive to someone that might otherwise try to buy the company, is definitely part of the reason that skywest inc. management bought back stock in the past couple of years.

dontsurf

i am disagreeing with the part that says, "...by them buying stock back they have increased their market value...". the action of buying back stock does not automatically increase anything. not even sure what you mean by "market value". stock price? market capitalization? well, i shouldn't say it doesn't increase anything. but i don't think you're talking about changes to the balance sheet. has the stock price gone up since they announced the buyback? yes. did they buy back all that stock at the lower price before they announced it? no. so it's actually costing them more to buy it since it went up. did officers of the company end up increasing their personal fortunes (on paper)? darn right. but not simply because skywest inc. bought back stock.

what is a quote from what article?

dontsurf

i don't think we have "huge" turnover. about 20/month, it seems to run. 2800 pilots. that's less than 1% per month. is that huge? my only other experience was at trans states, and they definitely had "huge" turnover (heck, i was part of it). but i definitely don't know how we compare to our peers like expressjet, republic, etc. i would be interested to know.

yeah, it is hard to convince the board of directors that the best thing to do with a bunch of excess cash is to give it to the employees. i definitely agree that it makes the company look bad to potential employees that we (pilots, at least) don't have yearly wage increases beyond our anniversary increase. i also agree that we look horrible to potential employees with our first year pay. i still came here though, and made more money 1st year here than i did 2nd year at trans states, with a much lower hourly wage. but that's beside the point. people don't show up to interviews or classes because of that low first year rate, and it's embarrassing, if you ask me.

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I don’t have the exact company wide numbers for turnover, but from my understanding we are well over 50% company wide, and as high as 80% in slc and den for gsa's. I will see what I can find.

dontsurf

oh ok, i was only talking about pilots. company-wide, i have no idea. i also wonder who we could compare ourselves to, company-wide? i don't know much about other regionals who run their own gates, etc. it would be very interesting to know how we compare to other companies. but 50% company-wide? we have what, 11,000 employees? that means we've turned over 5500 people in the past year? that would be amazing. and expensive!