Republic after the contract
01-15-2016 | 09:54 AM
#231
Holding
Joined: Jan 2012
Posts: 212
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Yup it's bad. But RJET is falling much faster than the market or transports or airlines. There was resistance around $2 from the August lows that was holding for a couple of days, but now that's been broken.
There are no more obviously strong resistance levels above zero now, so I think the stock will trade pretty much on news and bk rumors. It's certainly possible BB head faked a bankruptcy in order to buy up shares on the ultra cheap but I wouldn't buy for any other reason than to hedge a strong short position.
Disclaimer - I haven't figured out the stock market, that's why I still fly airplanes.
There are no more obviously strong resistance levels above zero now, so I think the stock will trade pretty much on news and bk rumors. It's certainly possible BB head faked a bankruptcy in order to buy up shares on the ultra cheap but I wouldn't buy for any other reason than to hedge a strong short position.
Disclaimer - I haven't figured out the stock market, that's why I still fly airplanes.
01-15-2016 | 09:58 AM
#232
Holding
Joined: Jan 2012
Posts: 212
Likes: 0
If you think the company won't go bankrupt, then you might get the deal of a lifetime. Be real careful here though. I think Republic brought in the same consultant that Mesaba used to declare (a sham) bankruptcy right after signing a great contract for its pilots. Can anyone confirm or elaborate?
01-15-2016 | 10:11 AM
#233
Gets Weekends Off
Joined: Dec 2012
Posts: 299
Likes: 0
01-15-2016 | 10:31 AM
#234
Gets Weekends Off
Joined: Apr 2015
Posts: 196
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Can someone educate me about Bankruptcy and its relationship to airlines. BK does not mean the company will go away, right?
Didn't Mesa declare BK and they are still well? How about Majors, AA/United/Delta all filed at one point yet they are doing better than ever, no?
So why is RAH BK so bad for its pilot group? Again, I'm just an ignorant pilot so please school me.
Cheers!
Didn't Mesa declare BK and they are still well? How about Majors, AA/United/Delta all filed at one point yet they are doing better than ever, no?
So why is RAH BK so bad for its pilot group? Again, I'm just an ignorant pilot so please school me.
Cheers!
01-15-2016 | 10:49 AM
#235
Gets Weekends Off
Joined: May 2015
Posts: 206
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I may buy. .... 
BK, even a "sham" one allows and has allowed airlines to strip way costs; like expensive contracts, and start from scratch to renegotiate.
Majors, regionals, all have used this as a tool to realign costs and get the airline under contol.
BK, even a "sham" one allows and has allowed airlines to strip way costs; like expensive contracts, and start from scratch to renegotiate.
Majors, regionals, all have used this as a tool to realign costs and get the airline under contol.
01-15-2016 | 11:39 AM
#237
Holding
Joined: Jan 2012
Posts: 212
Likes: 0
It also causes all existing stock to become and stay worthless. New stock is issued but the old bankrupt stock stays near zero. Same whether it's a sham or legitimate bankruptcy. But by all means speculate away. Short sellers need "bag holders" to-be in order to close their trades.
01-15-2016 | 11:56 AM
#238
Holding
Joined: Jan 2012
Posts: 212
Likes: 0
Taylor, bankruptcies can fall under one of two categories, reorganization or liquidation.
Reorganization involves DIP financing (debtor in possession) which is a bridge loan to pay the company's creditors while the company's obligations are reorganized under the supervision of a judge. The Republic pilot contract could be rewritten by the company and imposed by the judge once he approves it. Unprofitable contracts like the Delta flying could be shed or renegotiated. Shareholder equity would be wiped out, but the company would continue as a going interest with new shares of equity issued. This is the path the legacies, Frontier, Mesaba, and Mesa all took.
In a liquidation, the stock also goes to zero, but assets are auctioned off and the proceeds go to the bondholders and creditors. The company goes away.
Reorganization involves DIP financing (debtor in possession) which is a bridge loan to pay the company's creditors while the company's obligations are reorganized under the supervision of a judge. The Republic pilot contract could be rewritten by the company and imposed by the judge once he approves it. Unprofitable contracts like the Delta flying could be shed or renegotiated. Shareholder equity would be wiped out, but the company would continue as a going interest with new shares of equity issued. This is the path the legacies, Frontier, Mesaba, and Mesa all took.
In a liquidation, the stock also goes to zero, but assets are auctioned off and the proceeds go to the bondholders and creditors. The company goes away.
01-15-2016 | 12:17 PM
#239
Line Holder
Joined: Nov 2015
Posts: 34
Likes: 0
If some here are intent on seeing this company file BK. wait for several Quarters of REALLY BAD numbers. And you MAY have your wish
01-15-2016 | 02:20 PM
#240
Gets Weekends Off
Joined: Dec 2010
Posts: 977
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If you think the company won't go bankrupt, then you might get the deal of a lifetime. Be real careful here though. I think Republic brought in the same consultant that Mesaba used to declare (a sham) bankruptcy right after signing a great contract for its pilots. Can anyone confirm or elaborate?
They essentially paid out 66% of cash reserves to the CEO and VP, then gradually started booking costs for things like the new contract, Q400 losses, contested training reimbursement from Delta, etc..
Basically, Delta sold Mesaba to Pinnacle, ran us into a sham BK, used the cash to payoff execs and Colgan victims, then DAL bought us back outta BK for pennies on the dollar--and now that company is called Endeavor.
Basically a leveraged buyout...aka legal money laundering/theft.
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