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Jet Blue Stock: All-time Lows  
User currently offlineIncitatus From Brazil, joined Feb 2005, 4052 posts, RR: 13
Posted (7 years 3 weeks 1 hour ago) and read 4272 times:

With all US airlines stocks taking a beating, Jet Blue stock is trading at less than $7, which is lower than at any point after the IPO. Jet Blue's market cap is about $1.3 billion, which makes it vulnerable to a take-over bid.

Jet Blue's JFK presence may be highly valuable to another airline, such as Delta or United or USAirways. The New York market is a rich one that can tolerate higher fares than Jet Blue demands and the right buyer may attract more higher paying travelers to Jet Blue's current flights. Is JetBlue in danger of being acquired?

That also means all stock options are under water. Does Jet Blue stock have a high impact in employee morale and ability to retain staff??


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11 replies: All unread, jump to last
 
User currently offlineIkramerica From United States of America, joined May 2005, 21562 posts, RR: 59
Reply 1, posted (7 years 2 weeks 6 days 22 hours ago) and read 4121 times:

DL could solve the JFK capacity problem and replace their MD80/90 fleet in one fell swoop, and gain a bunch of needed 100 seaters in the process.

When DL talked about takeovers not being a dead issue, it might be a precursor to this. B6's business model is played out, and VX is going to be the new darling of the 20/30something trendsters.



Of all the things to worry about... the Wookie has no pants.
User currently offlineLuv2cattlecall From United States of America, joined Sep 2007, 1650 posts, RR: 2
Reply 2, posted (7 years 2 weeks 6 days 20 hours ago) and read 4007 times:
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Does B6 own any of their planes or are they all leased? Somehow, between the route system, the relatively high caliber employee pool, and what I'm sure are great prices on their A320s/options (since they bought them in a slump) as well as e190s, $1.3 Billion seems undervalued. I'd hate Delta to take over and rape the airline, and even though I know it'll never happened, it'd be great if VX took them over! The cabin interiors on VX are better but the staff and legroom at jetBlue win hands down. Knowing Branson, the chips would be tie dye color or something.


When you have to breaststroke to your connecting flight...it's a crash!
User currently offlineIkramerica From United States of America, joined May 2005, 21562 posts, RR: 59
Reply 3, posted (7 years 2 weeks 6 days 12 hours ago) and read 3752 times:

VX is tiny. They won't take over anyone. DL is actively looking for someone to acquire, and B6 is an interesting proposition. DL is already adding a B6 style product to it's fleet. DL wants to expand at JFK. DL has a lot of 20 year old MD80s to replace. B6 isn't union, so it won't upset the apple cart. The A320 may be an airbus, but an instant subfleet of 100+ planes with more on order to replace a subfleet of MDs isn't a bad thing. Adding 1 row of Y back and putting in F, the A320 would hold 14F/132Y or so.


Of all the things to worry about... the Wookie has no pants.
User currently offlineTugger From United States of America, joined Apr 2006, 5739 posts, RR: 10
Reply 4, posted (7 years 2 weeks 6 days 11 hours ago) and read 3691 times:

Quoting Incitatus (Thread starter):
The New York market is a rich one that can tolerate higher fares than Jet Blue demands and the right buyer may attract more higher paying travelers to Jet Blue's current flights. Is JetBlue in danger of being acquired?



Quoting Ikramerica (Reply 1):
B6's business model is played out, and VX is going to be the new darling of the 20/30something trendsters.



Quoting Luv2cattlecall (Reply 2):
even though I know it'll never happened, it'd be great if VX took them over!



Quoting Ikramerica (Reply 3):
VX is tiny.

When I first read this, all I could think of was how much the Branson empire would love to do this. I know they are small but boy would they get big fast (comparatively) if they did something like this which is something I think they need to do to thrive in the current market. And I am confident that they could handle it with the Branson empire experience and the similarities and synergies involved. But as I think about it I find it impossible to believe that someone else, someone like Delta or ??? wouldn't just out bid them.

Actually if I was blueJet I would start a stock buy-back right now.

Tug



I don’t know that I am unafraid to be myself, but it is hard to be somebody else. -W. Shatner
User currently offlineTOLtommy From United States of America, joined Dec 2003, 3304 posts, RR: 5
Reply 5, posted (7 years 2 weeks 6 days 11 hours ago) and read 3684 times:

Quoting Incitatus (Thread starter):
With all US airlines stocks taking a beating, Jet Blue stock is trading at less than $7, which is lower than at any point after the IPO.

Didn't it split 3:1 shortly after the IPO? If so, it still above the IPO price. Not to nitpick, but you know how the media loves to kick it's target....


User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5562 posts, RR: 7
Reply 6, posted (7 years 2 weeks 6 days 11 hours ago) and read 3657 times:

Quoting Tugger (Reply 4):
Actually if I was blueJet I would start a stock buy-back right now.

They don't have any free cash; their current ratio is negative; and they barely made money in the third quarter, which was a great quarter for just about everybody else. They are still selling or returning planes to lessors at just about the same rate they are taking deliveries.

They need a fare increase, not a stock buy-back.



I love long German words like 'Freundschaftsbezeigungen'.
User currently offlineMariner From New Zealand, joined Nov 2001, 25570 posts, RR: 86
Reply 7, posted (7 years 2 weeks 6 days 10 hours ago) and read 3625 times:
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Quoting TOLtommy (Reply 5):
Didn't it split 3:1 shortly after the IPO?

I think there have been at least two stocks splits, one in 2002 and one in 2005. You may be right about a previous one shortly after the issue. The charts show a total of three splits, but most of the stuff is archived and requires a little digging.

In the two later cases, I think they were both 3 for 2. So yes, the stock is still trading above the issue price ($10) and he first day of trading ($13.50).

That's not a lot of comfort to more recent stock buyers, however.

mariner



aeternum nauta
User currently offlineKevin777 From Denmark, joined Sep 2006, 1165 posts, RR: 1
Reply 8, posted (7 years 2 weeks 6 days 10 hours ago) and read 3574 times:

Simple question here..: Is JetBlue worth more dead than alive? They're not making much, if any, money, and the stock price reveals that investors don't believe much in the viability of their continued operation. However, as mentioned above, they've got a nice brand-new fleet, purchase options, JFK slots etc. etc. - could B6 be worth more dead than alive?

What do you guys think?

Best regards - and looking forward to fly B6 in ten days..!

Kevin777  Smile



"I was waiting for you at DFW, but you must have been in LUV" CPH-HAM-CPH CR9
User currently offlineScottB From United States of America, joined Jul 2000, 6808 posts, RR: 32
Reply 9, posted (7 years 2 weeks 6 days 5 hours ago) and read 3508 times:

Quoting Mariner (Reply 7):
I think there have been at least two stocks splits, one in 2002 and one in 2005. You may be right about a previous one shortly after the issue. The charts show a total of three splits, but most of the stuff is archived and requires a little digging.

In the two later cases, I think they were both 3 for 2. So yes, the stock is still trading above the issue price ($10) and he first day of trading ($13.50).

There have been three splits of JBLU, all 3:2. One share from the IPO would be 3.375 shares now. The original issue price was actually $27, and JBLU closed at $45 on its first day of trading. See http://money.cnn.com/2002/04/12/markets/ipo/jetblue/ for CNN/Money's story at the time of the IPO with the prices. Consequently, someone who had gotten JBLU at the actual IPO price of $27 would have paid the equivalent of $8 for each of his or her shares after the splits.

Consequently, JBLU shares are indeed under their 2002 IPO valuation -- but then, JetBlue isn't the growth story today that it was back then and crude wasn't approaching $100/bbl then either.

Quoting MasseyBrown (Reply 6):
Quoting Tugger (Reply 4):
Actually if I was blueJet I would start a stock buy-back right now.

They don't have any free cash; their current ratio is negative; and they barely made money in the third quarter, which was a great quarter for just about everybody else. They are still selling or returning planes to lessors at just about the same rate they are taking deliveries.

Their cash level (when you include investment securities) is good at present, but the real issue is that the company is becoming more and more leveraged as their profitability in and of itself hasn't been sufficient to finance their aggressive expansion plans. Their debt-to-equity ratio is up around 3 these days. It wouldn't surprise me if one of the real reasons they scaled back their growth was to keep the balance sheet shored up.

Given the possibility of a weakening economy, now is the time for airlines to work on building their cash piles -- not to spend free cash on stock buybacks. Well, unless you're LUV, but their leverage is practically non-existent when compared to the rest of the industry.


User currently offlineMariner From New Zealand, joined Nov 2001, 25570 posts, RR: 86
Reply 10, posted (7 years 2 weeks 5 days 23 hours ago) and read 3261 times:
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Quoting ScottB (Reply 9):
The original issue price was actually $27, and JBLU closed at $45 on its first day of trading.

My mistake, you are correct. I was looking at a secondary.

mariner

[Edited 2007-11-10 09:39:48]


aeternum nauta
User currently offlineIncitatus From Brazil, joined Feb 2005, 4052 posts, RR: 13
Reply 11, posted (7 years 2 weeks 5 days 16 hours ago) and read 3110 times:

Quoting Kevin777 (Reply 8):
They're not making much, if any, money, and the stock price reveals that investors don't believe much in the viability of their continued operation.

It is not a question of viability. When the stock market questions the viability of a company, well, the stock tanks multiple times quickly. It seems JetBlue is being priced by the stock market as just another airline. Investors do not believe JetBlue can produce superior returns through customer loyalty or a lean operation.



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