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SEC Investigating Alaska Air CEO  
User currently offlineenilria From Canada, joined Feb 2008, 7052 posts, RR: 13
Posted (3 years 9 months 4 weeks 22 hours ago) and read 6298 times:

http://english.capital.gr/News.asp?id=1062275

This doesn't sound good. I'm going to make a gigantic and glorious a.net leap here. This is the kind of thing that kills a CEO whether it is true or not. It could also be the kind of thing that could cause such monumental change that it might be an excellent pretext for DL and AA to swoop in with a bid.

SAN FRANCISCO -(Dow Jones)- Alaska Air Group Inc. (ALK) Chairman and Chief Executive William Ayer said Thursday he never gave insider information on Puget Energy Inc. to anyone, and the airline's board backed up his statement.

Earlier Thursday, Bloomberg News reported that the Securities and Exchange Commission was investigating Ayer and New York hedge fund Donald Smith & Co. over some well-timed bets made on Puget shares, before state regulators approved the Bellevue, Wash., utility's $7.4 billion acquisition by a group of investors led by units of Australian bank Macquarie Group (MQBKY, MQG.AU).

In a statement from Alaska Air, Ayer said he "never provided any material non-public information about Puget Energy to Donald Smith & Co., or anyone else."

Alaska Air's lead independent director, Marc Langland, said the board has "full confidence" in Ayer and his "high ethical standards."


36 replies: All unread, showing first 25:
 
User currently offlineflyingcat From United States of America, joined May 2007, 541 posts, RR: 0
Reply 1, posted (3 years 9 months 4 weeks 21 hours ago) and read 6124 times:

Guilty or not Aker may have to step down as an SEC probe will not go away overnight. AS for an AA or DL bid unless he is the only thing stopping a merger it will be hard. AS already has a poison pill in place in order to prevent a "forced" merger.

User currently offlineenilria From Canada, joined Feb 2008, 7052 posts, RR: 13
Reply 2, posted (3 years 9 months 4 weeks 20 hours ago) and read 5957 times:

Quoting flyingcat (Reply 1):
Guilty or not Aker may have to step down as an SEC probe will not go away overnight. AS for an AA or DL bid unless he is the only thing stopping a merger it will be hard. AS already has a poison pill in place in order to prevent a "forced" merger.

As I said, I can imagine this will cause disarray for the AS board of directors which would make it the perfect time for DL or AA to rush in to the picture. Ayer has been key in keeping the company independent. It's hard to imagine that the SEC would smear an active CEO without pretty strong evidence to investigate. Let's see what happens to their stock tomorrow.


User currently offlineYXwatcherMKE From United States of America, joined May 2007, 971 posts, RR: 2
Reply 3, posted (3 years 9 months 4 weeks 19 hours ago) and read 5895 times:

I would really hate to see AS lose it's independence by something like this. AS is a cool airline and I hope this will not kill Mr. Ayer's ability to lead AS.


I miss the 60's & 70's when you felt like a guest on the plane not cattle like today
User currently offlinemrskyguy From United States of America, joined Aug 2008, 1214 posts, RR: 3
Reply 4, posted (3 years 9 months 4 weeks 19 hours ago) and read 5829 times:

Quoting enilria (Thread starter):
This is the kind of thing that kills a CEO whether it is true or not. It could also be the kind of thing that could cause such monumental change that it might be an excellent pretext for DL and AA to swoop in with a bid.

You weren't kidding about the giant leap.    Another reason to stir the "who's-going-after-Alaska" question again? The airline world has seen its fair share of bonehead leaders, but not all resulted in someone "swooping" in like a knight in shining armor to buy the airline out.   



"The strength of the turbulence is directly proportional to the temperature of your coffee." -- Gunter's 2nd Law of Air
User currently offlineMoltenRock From , joined Dec 1969, posts, RR:
Reply 5, posted (3 years 9 months 4 weeks 18 hours ago) and read 5785 times:

Karma at work if you ask me. After the constant haranguing Alsaka engaged in to try to get Virgin America shut down, it looks like turnabout is fair play. Karma is a wonderful thing sometimes.

User currently offlineua777222 From United States of America, joined Dec 2003, 3348 posts, RR: 11
Reply 6, posted (3 years 9 months 4 weeks 16 hours ago) and read 5619 times:

He's not going anywhere if the board has taken to stand behind him.

At this point, unless criminally charged, he just needs to please the board. It's one thing for Puget's board to back him but for Alaska's board, which is unassociated to the investigation (as I assume they're investigating Ayer in his capacity as chairman of the board of Puget), to back him they clearly feel that he has not done anything wrong.

This too shall pass.



"It wasn't raining when Noah built the ark."
User currently onlinechrisair From United States of America, joined Sep 2000, 2072 posts, RR: 3
Reply 7, posted (3 years 9 months 4 weeks 14 hours ago) and read 5518 times:

Quoting MoltenRock (Reply 5):
fter the constant haranguing Alsaka engaged in to try to get Virgin America shut down, it looks like turnabout is fair play.

Oh please.....this is one of the dumbest things I've read on here in a long time.


User currently offlineenilria From Canada, joined Feb 2008, 7052 posts, RR: 13
Reply 8, posted (3 years 9 months 4 weeks 10 hours ago) and read 5432 times:

Quoting mrskyguy (Reply 4):
The airline world has seen its fair share of bonehead leaders, but not all resulted in someone "swooping" in like a knight in shining armor to buy the airline out.

Yes, but the timing is excellent for DL or AA. Merger mania is sweeping the industry just as this destabilizes the AS leadership.

Quoting MoltenRock (Reply 5):
After the constant haranguing Alsaka engaged in to try to get Virgin America shut down, it looks like turnabout is fair play. Karma is a wonderful thing sometimes.

Good point.

Quoting ua777222 (Reply 6):
He's not going anywhere if the board has taken to stand behind him.

Not true at all. They couldn't fire him now in any scenario. If they did and the investigation went nowhere he'd sue the bejesus out of them. There are three possible scenarios: a) he will be indicted and likely suspended from his job, b) they will find enough evidence to discredit him, but not charge him...and in 6 months Ayers will leave to "pursue other options and spend more time with his family", or c) he will not be charged and he will remain in his job. C is the least likely. B is the most likely. Regardless of whether he is legally guilty, the facts look bad and while they will publicly stand by him now, they will be looking to get rid of him after a breathing period has passed because of the embarrassment he has brought to the company. Additionally, keep in mind that AS is conservative and kind of new-agey. I think he is gone after a waiting period. Anyway, to my main point, expect Delta and American to be making pilgrimages up there very soon.

Quoting ua777222 (Reply 6):
they clearly feel that he has not done anything wrong.

Totally not the case. It is much more common to "stand behind your man" and then slit his throat in the dark of the night after the storm has passed. When is the last time a board said, "yep, he's guilty...take him away". NEVER?


User currently offlinecommavia From United States of America, joined Apr 2005, 11466 posts, RR: 61
Reply 9, posted (3 years 9 months 4 weeks 9 hours ago) and read 5353 times:

I guess I'm not really clear on how people are making a connection between this and AS somehow being absorbed by AA or DL.

How would one in any way impact the other?

AS wants to remain independent because it sees the writing on the wall that being consumed by either of its bigger partners would most likely mean the end of a big portion of the existing AS/QX network. (My guess is that those bigger partners also understand that same reality.)

This doesn't change that a bit.


User currently offlineenilria From Canada, joined Feb 2008, 7052 posts, RR: 13
Reply 10, posted (3 years 9 months 4 weeks 9 hours ago) and read 5320 times:

Quoting commavia (Reply 9):
I guess I'm not really clear on how people are making a connection between this and AS somehow being absorbed by AA or DL.

How would one in any way impact the other?

If this gets bigger it will create embarassment and disarray. As I'm sure you know, it is very difficult to stave off a public bid nicely above market value. There are often lawsuits against the board and such for resisting such things. For example, you might have noticed there are all sorts of lawsuits being filed in the WN-FL deal for the opposite reason. They are saying the board did not give other bidders a chance to respond, thus harming shareholder value. Bottom line, it is very difficult to defend not accepting a bid that's well above market value. To fight that off you have to have a strong leader pointing out their vision for the future without the bid. AS just lost that leader...perhaps not explicitly, but implicitly they did. He's gonna be in hiding until this thing blows over. He can't be defending the company against takeover and also defending himself against a lawsuit. It'll be a circus.

I'm just saying it is the perfect opportunity for DL (and maybe AA) to do what they have wanted to do for a long time...and the UA-CO/FL-WN deals only push further for short-term timing. BTW, even if they have a poison pill, if the shareholders want a deal they will get one. The board will simply get voted out and that's something else that Ayer's troubles makes a lot easier as loyalty to management will go down the toilet. Imagine Ayer arguing that shareholders "should not take the quick money" of a buyout as he defends himself against "well-timed" stock trades.


User currently offlineBennett123 From United Kingdom, joined Aug 2004, 7481 posts, RR: 3
Reply 11, posted (3 years 9 months 4 weeks 9 hours ago) and read 5320 times:

Having him as Chairman and CEO may not be good idea, concentrates too much power in one pair of hands and is a problem if that man resigns or is dropped.

User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1590 posts, RR: 2
Reply 12, posted (3 years 9 months 4 weeks 9 hours ago) and read 5308 times:

Quoting flyingcat (Reply 1):
AS already has a poison pill in place in order to prevent a "forced" merger.

What's the poison pill?


User currently offlineenilria From Canada, joined Feb 2008, 7052 posts, RR: 13
Reply 13, posted (3 years 9 months 4 weeks 9 hours ago) and read 5255 times:

Quoting LAXtoATL (Reply 12):
What's the poison pill?

Actually, this article says it went away a long time ago...

http://seattle.bizjournals.com/seattle/stories/2002/04/01/daily12.html

To tell you the truth, I thought they were pretty much outlawed a few years.


User currently offlineTVNWZ From United States of America, joined Feb 2006, 2359 posts, RR: 2
Reply 14, posted (3 years 9 months 4 weeks 8 hours ago) and read 5192 times:

Quoting enilria (Reply 13):

You are kidding me, right? What did you do sell some ALK short?

This is an extremely well run public company listed on the NYSE. Whatever issues the CEO may have are no doubt well in hand by the BOD and its executive committee. Ultimately, it may prove to be embarrassing. there may be another CEO. But, that is about it.

Disarry? Hardly.


User currently onlineseabosdca From United States of America, joined Sep 2007, 5336 posts, RR: 4
Reply 15, posted (3 years 9 months 4 weeks 8 hours ago) and read 5184 times:

Not all SEC enforcement investigations lead anywhere. The SEC tries to keep them under wraps for exactly that reason. Sometimes, as here, they leak prematurely.

The SEC saw a suspicious trade. So it will ask for emails, documents, records from the people who handled the trade, and interviews with the people involved. It might find something to support a charge, or it might not.

At this point, no one really knows how much trouble Mr. Ayer may be in except Mr. Ayer, his lawyers, and anyone who received any tips he may have provided.


User currently offlineMainland From United States of America, joined Jun 2004, 309 posts, RR: 0
Reply 16, posted (3 years 9 months 4 weeks 8 hours ago) and read 5132 times:

Quoting enilria (Reply 13):
Actually, this article says it went away a long time ago...

Bingo. An activist shareholder has put forth proposals in past years to force the company to get shareholder approval before they implement another in the future, but it has repeatedly failed. So, while Alaska does not currently have a plan, there's nothing stopping them.



You don't need a passport to know what state you're in...
User currently offlinemrskyguy From United States of America, joined Aug 2008, 1214 posts, RR: 3
Reply 17, posted (3 years 9 months 4 weeks 8 hours ago) and read 5132 times:

Quoting enilria (Reply 8):
Yes, but the timing is excellent for DL or AA. Merger mania is sweeping the industry just as this destabilizes the AS leadership.

How is this excellent? What is so "destabilized" at Alaska? If anything, Alaska's in a position to buy an airline themselves vs. being the constant merger target from forum posters such as yourself.



"The strength of the turbulence is directly proportional to the temperature of your coffee." -- Gunter's 2nd Law of Air
User currently offlineenilria From Canada, joined Feb 2008, 7052 posts, RR: 13
Reply 18, posted (3 years 9 months 4 weeks 7 hours ago) and read 5059 times:

Quoting TVNWZ (Reply 14):
You are kidding me, right? What did you do sell some ALK short?

So you think that buy suggesting that this could lead to ALK being purchased that would result in me somehow gaining from a short position? I think your knowledge of finance needs some updates.  
Quoting seabosdca (Reply 15):
Not all SEC enforcement investigations lead anywhere. The SEC tries to keep them under wraps for exactly that reason. Sometimes, as here, they leak prematurely.

True, but they often leave the investigated party tainted.

Quoting mrskyguy (Reply 17):
How is this excellent? What is so "destabilized" at Alaska? If anything, Alaska's in a position to buy an airline themselves vs. being the constant merger target from forum posters such as yourself.

The timing is excellent. If you hadn't noticed the largest LCC merger ever was just announced and a merger to form the world's largest airline was just completed. You don't think airline mergers are in vogue at the moment?


User currently offlinehatbutton From United States of America, joined Mar 2005, 1500 posts, RR: 14
Reply 19, posted (3 years 9 months 4 weeks 6 hours ago) and read 4833 times:

Quoting enilria (Thread starter):
It could also be the kind of thing that could cause such monumental change that it might be an excellent pretext for DL and AA to swoop in with a bid.

Come on enilria. That's all I have to say.


User currently offlinepeanuts From Netherlands, joined Dec 2009, 1438 posts, RR: 4
Reply 20, posted (3 years 9 months 4 weeks 6 hours ago) and read 4766 times:

Quoting enilria (Reply 8):
destabilizes the AS leadership.

Their stock is up more than 4% so far today. No panic at all.

Yesterday investors were trying to figure things out. Today it seems they've "concluded" things must be ok.

[Edited 2010-10-08 10:38:26]


Question Conventional Wisdom. While not all commonly held beliefs are wrong…all should be questioned.
User currently offlineenilria From Canada, joined Feb 2008, 7052 posts, RR: 13
Reply 21, posted (3 years 9 months 4 weeks 5 hours ago) and read 4738 times:

Quoting hatbutton (Reply 19):
Quoting enilria (Thread starter):
It could also be the kind of thing that could cause such monumental change that it might be an excellent pretext for DL and AA to swoop in with a bid.

Come on enilria. That's all I have to say.

Regardless of this event, DL or AA are gonna try to buy AS. The only question is whether this spurs it to happen sooner. Agree with me?


User currently offlinepeanuts From Netherlands, joined Dec 2009, 1438 posts, RR: 4
Reply 22, posted (3 years 9 months 4 weeks 5 hours ago) and read 4719 times:

Quoting enilria (Reply 21):
DL or AA are gonna try to buy AS. The only question is whether this spurs it to happen sooner. Agree with me?

I'll give you that. Something will happen. It may be in a different form than most of us "expect" though.



Question Conventional Wisdom. While not all commonly held beliefs are wrong…all should be questioned.
User currently onlineseabosdca From United States of America, joined Sep 2007, 5336 posts, RR: 4
Reply 23, posted (3 years 9 months 4 weeks 5 hours ago) and read 4508 times:

Quoting enilria (Reply 18):
True, but they often leave the investigated party tainted.

Unless there is a charge or a settlement, there should be no taint. If you hold it against someone that he underwent an SEC investigation even though he was cleared, then you are ignorant.

Quoting enilria (Reply 21):
Regardless of this event, DL or AA are gonna try to buy AS. The only question is whether this spurs it to happen sooner. Agree with me?

No. AS couldn't do what it does if it were saddled with the cost structure of DL or AA. Both DL and AA know this. But AS is enough of a profit generator for both DL and AA that they have no desire to shut it down.

What each of the bigger carriers *will* try to do, I expect unsuccessfully, is persuade AS to drop its relationship with the other.

[Edited 2010-10-08 11:19:09]

User currently offlineTVNWZ From United States of America, joined Feb 2006, 2359 posts, RR: 2
Reply 24, posted (3 years 9 months 4 weeks 5 hours ago) and read 4434 times:

Quoting enilria (Reply 18):
So you think that buy suggesting that this could lead to ALK being purchased that would result in me somehow gaining from a short position? I think your knowledge of finance needs some updates.

Maybe, but all my businesses (except one) are having record years, so I know a little. But, I think your knowledge of how a public company operates needs some updates.  


25 Post contains images enilria : Well, HP bought US so AS could buy AA. Same difference. Who buys who doesn't matter to me. The new company wouldn't be called Alaska, though. LOL Oh,
26 Antoniemey : Or... one or both could buy a large stake in AAG...
27 goldenstate : I would say there are things afoot right now that could spur action sooner rather than later. However, this SEC issue is not one of them.
28 EA CO AS : Nope. AS is successful, in large part, to its relationship with BOTH carriers - and each DL and AA realize that. There'd be no point in either carrie
29 thomacf : He's done. He'll be indicted in the next 30 days and will be out the door at AS in the next few weeks if not sooner. When the SEC is involved like thi
30 WesternA318 : In my opinion, and thats all it is, maybe all he did was take a stab at withdrawing his shares at a time when he felt he needed to for any amount of
31 FlyASAGuy2005 : The problem here, and i';ve studied cases like this for the past 4 years, is they generally keep things very hush hush until they have concrete evide
32 7673mech : Sorry, but this is too much of a stretch. The fact that a chairman and CEO of a company gets investigated by no means has any relation to the company
33 ua777222 : Uhhh.....a month ago.......cue Mark Hurd (oh and it cost them billions in market-share overnight) The youngest member of this 'new-age' board is 56..
34 ua777222 : And for all of the remarks about this being some kind of Karma for the birther stuff he pulled with VX: As CEO of an airline that would face intense c
35 ua777222 : Mr. Ayer appointed yet another member to the board of directors today. Yet to hear of anything else....I believe this too has died down.
36 KFlyer : AS is probably one of the best carriers from North America to date and I'll never hesitate to rank them on second place, just after WN - in terms of b
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