Spirit of NKS
08-01-2012 | 06:35 PM
#4361
Gets Weekends Off
Joined: Jan 2008
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From: 319/320/321...whatever it takes.
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.
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.
I know what you're saying, but you are using the term 'dilution' wrong. Say a company issues 1 million shares of stock ar their IPO. A year later, they want to make some more money, so they issue another 500k of shares of stock. That is dilution. They are diluting the stock value by having more of them.
Stock dilution - Wikipedia, the free encyclopedia
When an investor sells off a large amount of stock (that was already issued), the market does respond with a lower price, but it is because of supply and demand forces. Say a stock sells for $10. If I have 1000 stock and I want to sell some, I put a sell order onto the market. Maybe people are willing to buy 200 shares at $10. Another group are willing to buy 200 more shares for $9. Another group may only want to pay $8 for it, etc. If the investor wants to get rid of all of his stock, he will have to take what someone is willing to pay for it. When all of the people who are willing to pay $10 are gone, the "value" of the stock (what someone is willing to pay for it) goes down. Spirit stock went down a little for those reasons, not dilution.
I agree with you that Oaktree is profit taking, and I dont see us as a takeover target in the near future. But I am usually wrong.
08-02-2012 | 04:46 AM
#4362
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Joined: Jul 2008
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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.
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.
I think they are just getting out of the Spirit thing, but I can't help to question why they do it at the point where Spirit is profitable with a good looking future.
08-02-2012 | 07:56 AM
#4363
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because we are going to implode, and disappear altogether.
Millions of people and companies every hour make decisions to buy or sell securities. Buy crappy companies (in 2010 it was us that even some of our own coworkers didn't give us a year), and others selling apple after SJ die.) people buying FB (me) on day one, and selling 10 bucks cheaper. then buying NK again at 17.28 to get ready to sell next week at 23 (fingers crossed).
Oak-tree is just getting out an cashing in. That's all I know, since I don't seat on the board.
Some people may claim knowledge, but they just speculate with negative stuff because it triggers some weird juice in their brains.
Nobody know, except for oaktree.
Millions of people and companies every hour make decisions to buy or sell securities. Buy crappy companies (in 2010 it was us that even some of our own coworkers didn't give us a year), and others selling apple after SJ die.) people buying FB (me) on day one, and selling 10 bucks cheaper. then buying NK again at 17.28 to get ready to sell next week at 23 (fingers crossed).
Oak-tree is just getting out an cashing in. That's all I know, since I don't seat on the board.
Some people may claim knowledge, but they just speculate with negative stuff because it triggers some weird juice in their brains.
Nobody know, except for oaktree.
08-02-2012 | 08:22 AM
#4364
Gets Weekends Off
Joined: Jan 2008
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From: 319/320/321...whatever it takes.
Sorry but trying to understand the concept. Oaktree is selling their remaining stocks to lower the price to make it more attractive for a buyer ? What is the advantage for Oaktree in this ?
I think they are just getting out of the Spirit thing, but I can't help to question why they do it at the point where Spirit is profitable with a good looking future.
I think they are just getting out of the Spirit thing, but I can't help to question why they do it at the point where Spirit is profitable with a good looking future.
You are right. There is no advantage to Oaktree for doing this, unless they are in cahoots with someone else who wants to buy the company. That would make no sense because Oaktree would sell their stock and have no stake in the company before the value went up. It is illegal (to collaborate) and a breach of fiduciary trust of thier own stockholders. They are just cashing out.
08-02-2012 | 08:26 AM
#4365
Gets Weekends Off
Joined: Mar 2009
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because we are going to implode, and disappear altogether.
Millions of people and companies every hour make decisions to buy or sell securities. Buy crappy companies (in 2010 it was us that even some of our own coworkers didn't give us a year), and others selling apple after SJ die.) people buying FB (me) on day one, and selling 10 bucks cheaper. then buying NK again at 17.28 to get ready to sell next week at 23 (fingers crossed).
Oak-tree is just getting out an cashing in. That's all I know, since I don't seat on the board.
Some people may claim knowledge, but they just speculate with negative stuff because it triggers some weird juice in their brains.
Nobody know, except for oaktree.
Millions of people and companies every hour make decisions to buy or sell securities. Buy crappy companies (in 2010 it was us that even some of our own coworkers didn't give us a year), and others selling apple after SJ die.) people buying FB (me) on day one, and selling 10 bucks cheaper. then buying NK again at 17.28 to get ready to sell next week at 23 (fingers crossed).
Oak-tree is just getting out an cashing in. That's all I know, since I don't seat on the board.
Some people may claim knowledge, but they just speculate with negative stuff because it triggers some weird juice in their brains.
Nobody know, except for oaktree.
Oaktree has been selling off those "restricted" shares over the past year. They are now part of the public domain, or float.
Oaktree still has a small stake in Spirit Airlines. They just offered 9.4 million common shares to the public. They still hold roughly 3.6 million restricted shares (not included in the float).
Its my understanding that the stock offered last Tuesday was part of Oaktree's restricted holdings which are now to be publicly traded. The issuance of stock last Tuesday could result in dilution as LeftHanded more accurately described than I could. I think by using the term "sell" rather than "issuance," I created some confusion.
It doesn't mean there's gonna be a purchase of Spirit by another entity. I was just trying to explain that dilution could lead to possible buyout interests when the market cap is perceived to be overvalued.
The entire industry is overvalued and hence, some analysts have started recommending investors sell their airline holdings based upon peak industry load factors and peak RASM. Spirit is the exception.
Here's a link to NASDAQ's holding summary for SAVE. I find it to be pretty accurate and up-to-date:
Spirit Airlines, Inc. (SAVE) Institutional Ownership & Holdings - NASDAQ.com
08-02-2012 | 08:48 AM
#4366
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Joined: Jan 2008
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From: 319/320/321...whatever it takes.
Great find ALPO. It looks like Oaktree had 22.5M shares and sold 9.5M for a change of 42%. They now have a stake of 13M shares in spirit. Either they have additional restrictions (like they can't sell more for another 6 months, for example), or they are just taking some profit. They still have a decent investment in Spirit. There are some interesting companies invested in us!
08-02-2012 | 08:50 AM
#4367
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Thanks ALPO....
08-02-2012 | 09:09 AM
#4368
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From: The Best Coast
Oak Tree is a distressed debt fund and Spirit no longer fits their criteria
08-02-2012 | 09:20 AM
#4369
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Oak Tree is a distressed debt fund and Spirit no longer fits their criteria
08-02-2012 | 10:34 AM
#4370
Gets Weekends Off
Joined: Mar 2009
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Great find ALPO. It looks like Oaktree had 22.5M shares and sold 9.5M for a change of 42%. They now have a stake of 13M shares in spirit. Either they have additional restrictions (like they can't sell more for another 6 months, for example), or they are just taking some profit. They still have a decent investment in Spirit. There are some interesting companies invested in us!
I must be fatigued. Hopefully the moderators won't tell me they're 'dissapointed' in my posts.
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