..........................................

 

Yep!

How much of Spirit does Indigo still own?

 

Oaktree never wanted to be invested in Spirit as long as they were. They don't want to own/run an airline. They invested in us with the promise of an IPO in the near future. Then came the financial collapse in 2008. IMO, they are just cashing out, many years later than planned.

 

like 12mil shares

 

So this will cause the stock price to drop, right? (down %-3.5 in after hours )

 

Yes. Its called 'dilution.'

The stock price typically drops when more stock is issued into the float (publicly traded stock). By selling off their remaining stake of roughly 9.3 million shares, it effectively devalues the holdings of existing stockholders.

So, why would they do this? Well, they're most likely just cashing out and taking profits. However, dilution can occur when a company may have interest from a potential buyer. If Oaktree feels that NK is overvalued from a market cap perspective, they could sell their remaining stock. By selling off their remaining stake, it will lower the stock price and possibly create an opportunity for a buyer to offer a premium for NK stock. NK's market cap is roughly $1.5 billion.

This happened when AirTran was sold to Southwest (Guadalupe Holdings). Credit Suisse quietly issued AirTran stock into the float. The stock price dropped. Southwest came in and offered AirTran's stockholders a premium for their stock. A sale was commenced.

The opposite occurs when a company 'buys back' their own stock. It removes stock from the float, inflating the value of existing holdings causing the stock price to rise. This tactic could be used when a company wants to secure more control, or make their company more expensive to purchase, or to prevent a hostile takeover scenario.

Ownership can influence their own company's stock price simply by manipulating the float...either by selling off large chunks of stock (dilution), or by repurchasing their own company's shares.

 

Thanks ALPO, great explanation. Now the question is , will this 9 mil shares be bought by a single buyer or open market?

 

Spirit Airlines is a BUY and 4 Stock Analyses Grabbing Attention Today | Wall St. Cheat Sheet

 

The stock offering from Oaktree may cause the "weakness" they mention in the article.

 

I'm thinking I'm glad we didn't trade QOL or pay for stock options. Seems the real issue now is Scope.

At least I understand cables and bell-cranks so transition training back to the 9 will be a breeze.

Pumps on High Descent Check!