Jet blue wants us now
#691
Covfefe
Joined APC: Jun 2015
Posts: 3,001
I completely disagree. Imagine both of our surprises?! When you sell a stock is an individual and personal decision. Me, personally am not selling a stock at $30 I bought for $28. I buy stocks to invest in a company that i Believe will
Climb much higher and therefore make me Money. If that’s $1000 profit or $10,000 profit that’s up to the individual investor. You May think that $8000 is a ‘good deal.’ And perhaps it is . For you. But what do you have to give up personally by going the way of B6 to Harvest that profit? $8000 is 1/2 month or less for most captains. Simply not rich enough for me. I’ll gladly take the risk in owning more shares of ULCC and see where that gets me in 5 years time. I’m a buy and hold type of investor. I stipulate not everyone is. Throw in the $30 isn’t an instant payout then Definitely count me out. And if there’s so many headwinds ahead then why is B6 offering such a ‘premium’ and basically over paying for Nk?
Climb much higher and therefore make me Money. If that’s $1000 profit or $10,000 profit that’s up to the individual investor. You May think that $8000 is a ‘good deal.’ And perhaps it is . For you. But what do you have to give up personally by going the way of B6 to Harvest that profit? $8000 is 1/2 month or less for most captains. Simply not rich enough for me. I’ll gladly take the risk in owning more shares of ULCC and see where that gets me in 5 years time. I’m a buy and hold type of investor. I stipulate not everyone is. Throw in the $30 isn’t an instant payout then Definitely count me out. And if there’s so many headwinds ahead then why is B6 offering such a ‘premium’ and basically over paying for Nk?
If you think $30 is too low of a value for SAVE stock for you to sell on a 12-24 month timeline, then I assume you are buying a lot of shares here in the teens? If you liked it enough at $28 to buy it…then you must love it at $19. You’re literally saying you think the stock is worth north of 150% of what professional investors are currently buying/selling it at, and would turn down today a 1-2 year 50% ROI (that’s better than any professional fund manager and investor could do consistently) thinking you can do better by holding. Additionally, if you’re of the opinion that F9/NK stock is undervalued and believe in the ULCC business model and its future prospects, you could buy a ton of ULCC stock, also basically at an all time low, since the elimination of spirit would open more opportunity with less competition with spirit gone, and as a SAVE shareholder you’ll end up with ULCC shares anyway. Anyway, don’t take financial advice from me or any other pilots, but I urge you to refine your investment strategy (or at least the part about using your purchase price as a basis or partial basis upon which to sell, instead of solely evaluating current/future value as it relates to the current share price).
And why is B6 paying a premium to buy NK? Because that’s how all acquisitions work. You can’t really buy a public company without offering a premium to the current share price…that’s how M&A works. Whether or not that turns out to be a wise investment is a giant TBD/question mark. It could help put B6 into a bankruptcy (would be a funny coincidence since B6+NK=BK…but I digress) if those headwinds and acquisition/integration costs prove to be too great, especially if revenue falls with the economy tanking and oil rising, and if the integration faces a lot of issues as I predict it would trying to mix oil and water with the vastly different labor groups, cultures, and products.
And offering a premium to close a buyout isn’t necessarily “overpaying” as you characterize it. Overpaying is when you pay more than something is worth, like what Alaska did with Virgin. In the models that the B6 finance team has made, the $3.6bn price and $4-$5bn in overall merger costs will yield a greater return than by staying organic. Also of note, what jetblue would get planes, pilots, and bases wise from spirit is a much better deal dollar for dollar than what it would have gotten from Virgin, even at $30/sh or $3.6bn. And side note: covid allowed jetblue to get organically everything it would have gotten from Virgin (which sold to Alaska for $2.6bn, and basically then all got unloaded anyway). So, that worked out fairly well for B6. That’s unlikely to happen again in the case of not closing the B6+NK deal (there’s just no way for B6 to scale organically as fast as an NK purchase would allow). $3.6bn for NK (plus integration costs) yields a lot more airplanes / bases / pilots for only $1bn more than the VX sale would have been. So, from that standpoint, it’s a much better deal than the one they walked away from a few years ago.
#692
Gets Weekends Off
Joined APC: Oct 2019
Posts: 144
Hes getting a massive payout either way.
I think the Spirit board got caught making a sweetheart deal amongst buddies with nice perks for themselves, and are nervous about it. Or everything is on the up and up and it’s amateur hour as they try to play with the big boys and navigate this whole thing while poorly managing their narrative.
I think the Spirit board got caught making a sweetheart deal amongst buddies with nice perks for themselves, and are nervous about it. Or everything is on the up and up and it’s amateur hour as they try to play with the big boys and navigate this whole thing while poorly managing their narrative.
#693
Line Holder
Joined APC: Apr 2019
Posts: 81
Legit question for the armchair MBAs. (Hypothetical example with rounded numbers, so please don't tell me the stock price is 14.29548 or whatever.... yes we know everything is dropping)
John Q has 10k shares of SAVE. Market price is $20. B6 offers $30. John Q bought shares at $20. Can John Q accept the B6 offer at $30 on 6670 shares and hold the remaining 3330? Or is the offer an all shares in totality or nothing at all? In other words, does the B6 offer potentially allow the investors a risk free cash out of their cost basis and allow them to keep an approximate 30% of their remaining shares risk free? (Assuming they bought in at around the $20 mark).
John Q has 10k shares of SAVE. Market price is $20. B6 offers $30. John Q bought shares at $20. Can John Q accept the B6 offer at $30 on 6670 shares and hold the remaining 3330? Or is the offer an all shares in totality or nothing at all? In other words, does the B6 offer potentially allow the investors a risk free cash out of their cost basis and allow them to keep an approximate 30% of their remaining shares risk free? (Assuming they bought in at around the $20 mark).
#694
Almost there
Joined APC: Apr 2021
Posts: 1,118
Legit question for the armchair MBAs. (Hypothetical example with rounded numbers, so please don't tell me the stock price is 14.29548 or whatever.... yes we know everything is dropping)
John Q has 10k shares of SAVE. Market price is $20. B6 offers $30. John Q bought shares at $20. Can John Q accept the B6 offer at $30 on 6670 shares and hold the remaining 3330? Or is the offer an all shares in totality or nothing at all? In other words, does the B6 offer potentially allow the investors a risk free cash out of their cost basis and allow them to keep an approximate 30% of their remaining shares risk free? (Assuming they bought in at around the $20 mark).
John Q has 10k shares of SAVE. Market price is $20. B6 offers $30. John Q bought shares at $20. Can John Q accept the B6 offer at $30 on 6670 shares and hold the remaining 3330? Or is the offer an all shares in totality or nothing at all? In other words, does the B6 offer potentially allow the investors a risk free cash out of their cost basis and allow them to keep an approximate 30% of their remaining shares risk free? (Assuming they bought in at around the $20 mark).
Edit for added numbers…
111 million outstanding shares X $33 per share gives you the purchase price initially offered by JB.
#695
The REAL Bluedriver
Joined APC: Sep 2011
Position: Airbus Capt
Posts: 6,889
Nevermind...
Last edited by Bluedriver; 05-21-2022 at 02:08 PM.
#698
Line Holder
Joined APC: Apr 2022
Position: A320 captain
Posts: 91
Bots are not allowed, and using one would be grounds for termination.
Thread
Thread Starter
Forum
Replies
Last Post