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Trial over JetBlue's Spirit merger ends with US judge mulling options
Tue, December 5, 2023
https://finance.yahoo.com/news/jetblue-trials-end-urges-judge-151836412.html?fr=sycsrp_catchall
Federal Judge Leans Towards Approval of JetBlues Acquisition of Spirit Airlines
December 6, 2023
On December 6, 2023, a significant development unfolded in the aviation industry as a federal judge leaned towards granting approval for JetBlue’s proposed acquisition of Spirit Airlines, valued at a staggering $3.8 billion. Despite the Justice Department’s efforts to impede the deal, the judge hinted that it could move forward under the condition that JetBlue divests additional assets to address potential antitrust concerns.
While the Justice Department argued vehemently that the merger would result in inflated prices and reduced flight options, the judge expressed reservations about obstructing a deal within an industry that is constantly evolving and facing unprecedented challenges in the post-COVID era. This dynamic environment presents both unique opportunities and hurdles that must be carefully considered.
The final verdict ultimately rests in the hands of the judge presiding over the non-jury trial in Boston, who holds the authority to shape the future of this pivotal acquisition.
I think this will be at $10 by spring (April) 2024. This is a well run airline. They are just coping with a few things that are outside of their control. I view them as seasonal issues. Having said that, I don't like having $$ tied up for that long. Hopefully the outcome of the ongoing law suit will give the pps a spike (boost). Outcome should occur in December.
Industry as a whole is starting to turn around. And good news and PPS goes to $6-$7.00. IMHO.
Waiting for the turnaround
I would feel better if management would provide an outline on their growth strategy
IMO this is a 2x or 3x banger somewhere between now and spring 2024. JMHO
Pigs get fed, hogs get slaughtered.
Glad I only bought a few shares. Earning worse than expected. Holding, but not liking what I see. HAWK
I just bought some at $4.11. Looks like a "decent" Risk/Reward price. TWT. HAWK
Yep I’m in for the ride at 4.20 hahahha
lol and I’m at 4.20 hahahhahha
If it is not rescheduled again, the trial will start 1 week from tomorrow.
Spring will bring May Flowers..... or much smoother.
JBLU americanbulls says BUY. I have $5.50 as "fair value". Just a FYI. HAWK
OTC from a delisting! Not going to happen. You must not be aware of the delisting rules. PPS must fall below $1 for 30 consecutive days, and even then they have 6 months (180 days) to get it back up to $1. And in most cases another 6 month extension is granted to achieve that $1 threshold.
So, NO. If you are planning on shorting this stock in the hope it will be delisted to the OTC, you are dreaming. Wishful thinking. I suspect JBLU will be back up between 7-10 bucks somewhere between Thanksgiving and spring 2024. Short term... it depends on how the current law suit goes which commences on October 30.So, short term I expect I lot of volatility.
I'm bullish. This is almost rock bottom price here IMO. I'm buying at these levels.
It is down because of poor forward guidance by UAL on their conference call this morning. All airlines have dropped. UAL is down over 8%, AAL almost 5%, JBLU and DAL around 4%. Oil is back to $90/barrel. You won't see an upside catalyst to JBLU until the trial which was pushed back to 10/30/2023. If the earnings call next week is particularly good in forward guidance you might also get a pop.
I bought more at $4.33 this morning.
It’ll be on the OTC yet!! Guess I’ll buy more in the 3’s.
The trial has now been delayed until Oct. 30
https://seekingalpha.com/news/4020500-doj-trial-to-block-jetblues-planned-spirit-deal-delayed-again
JetBlue antitrust trial starts in 11 days. I would assume the stock would start moving up towards the end of next week in anticipation of the uncertainty being resolved one way or the other. I think winning the trial would be better longer term, but any outcome will help the stock in the short run.
However, their debt is 3x their cash. Having said that, finanancial leverage like that is very common in the airline industry.
According to JetBlue's most recent quarterly earnings report (for the quarter ended June 30, 2023), the company has $1.82 billion in cash and cash equivalents and 333.25 million shares outstanding. This means that JetBlue has $5.45 per share in cash and cash equivalents.
JetBlue's company guidance for full-year 2023 earnings is for adjusted earnings per share (EPS) of $0.05 to $0.40.
read the news and fundamental. looks like you can use some help. keep buying and thank me later
Delisting will not happen so there is virtually no risk of an R/S.. The pps would have to fall below $1 for 30 consecutive day. Not realistic.
JMHO, we'll be seeing $8-10/share somewhere between now and the summer of 2024. That's a 2x profit from these prices.
He posted the same message two days in a row. It is just wishful thinking. I don't think you will see a meaningful upside move until at least the second week in October. As the 10/16 trial date approaches, you may get interest from hedge funds willing to bet on the outcome. As I have said in a previous post, JetBlue wins regardless of outcome. If the lose, they don't have to spend $3.8 billion for an asset that is not worth $1.5 billion today and if they win, they become the undisputed 5th largest carrier with 500 aircraft and a deep order book. They will have seriously overpaid, but it will vault them into the big leagues going forward.
It is the uncertainty that is weighing on the stock. That and jet fuel prices.
It would not be a hostile takeover. Spirit shareholders do not want to acquire another company and Spirit's balance sheet does not provide an opportunity for an acquisition to happen. Spirit management knows they can not support an acquisition of any type and raising capital would be a moot point.
As for Jet Blue being delisted or moved to OTC, it will not happen because they can do a reverse stock spilt. Jet Blue has an intrinsic value and a book value that exceeds the current market cap.
Not to mention that Blackrock bought over 9 million shares over the 3 month period ending June 2023, as well as other very large investment firms acquiring the stock on the open market.
To be fair Wellington has sold a substantial amount of stock for the quarter ended June 2023, but the buying by other institutional investors has been far more than the selling.
This can be as simple as hitting the bod for the past 3 months
I am LONG JBLU and would like to see an increase in stock price, but I am curious why do you post BIG UPSIDE TODAY
What is your thesis behind the statement, or are you just hopeful the stock will go up. I am trying to understand what you are posting or if its hyperbole
big upside today.
Good points, but with a positive outcome from the upcoming October trials (which I believe will happen), then everything else will be a moot point IMO.
big upside from here
The removal of jetblue from the S&P 400 midcap index on 9/18 may have led to some near term selling pressure. JBLU was added to the small cap S&P 600 but there is substantially less interest in that index by ETFs/Mutual Funds that net net there was selling pressure on the stock.
I believe that Jetblue will be the winner in that trial. They have been taking actions by divesting assets to improve the optics on their behalf. Time will tell.
BOSTON, March 21 (Reuters) - A U.S. judge on Tuesday scheduled an Oct. 16 trial in the U.S. Justice Department's lawsuit seeking to halt JetBlue Airways Corp's (JBLU.O) planned $3.8 billion acquisition of ultra-low-cost carrier Spirit Airlines Inc (SAVE.N).
U.S. District Judge William Young in Boston scheduled the nonjury, four-week trial during the first hearing to be held in the blockbuster case, which the Justice Department filed two weeks ago.
JBLU is stuck in a bearish trend until the antitrust trial next month. Too much uncertainty for people to go long. However, resolution of the trial will be bullish for the stock regardless of outcome. If they lose, the market will cheer the fact that they are not overpaying by almost $2 billion for Spirit. Spirit stock will likely crater to half its current value (less than $10/share). If they win, the market will cheer because they just became the lowest cost bulge bracket airline with almost 500 aircraft and a deep order book and in the process they eliminated a lower cost rival. The only airline of any real size that will have a lower cost structure will be frontier (and allegiant but they are really too small to consider). Frontier's and Jetblue's route structure doesn't really overlap. Frontier may well be a future acquisition of Jetblue.
Won't happen. That would be panic thinking. In 6 months this will be at $8+. Good buy opportunity for those with longer term thinking.
Won’t be long before it loses NASDAQ qualifications and gets bumped down to the OTC….. this is beyond ridiculous.
Wouldn’t it be ironic if Spirit initiated a hostile takeover.
Under 5.00 today. Im waiting for 3.00s.
A public company WORTH is determined by the market cap. The stock price determines the WORTH, but only when calculated on a fully diluted basis.
In other words, a company with a $5.00 stock price can be WORTH $10 Billion, and can acquire a company that has a $25.00 stock price if the WORTH is only $5 Billion.
Jet Blue is worth $1.6 Billion
Spirit is worth $1.7 Billion
These numbers are based on today's closing stock price.
Spirit has been valued (WORTH) in the $1.7 Billion range for last few months.
Jet Blue was valued (WORTH) in the $3.2 Billion range just 2-months ago.
The recent decline has been bad for Jet Blue and therefore not sure how and if that will impact the acquisition/merger.
Donald Smith & CO. Inc. (and others) Increases Stake in JetBlue Airways.
https://beststocks.com/donald-smith-co-inc-increases-stake-in-jetblue/
This is a patience game.
Sweet Jesus….. We have a company worth $4/share trying to buy a company worth $16/share.
I’m now wondering if JBLU is on the verge of insolvency. This is now hitting all time low levels with zero reason (that are known publicly) for it. Fuel rates affected other airlines, but this is pathetic.
Will we see $3’s?
I think that once the acquisition/merger with Spirit gets the green light we'll see a 2x banger here.
I believe JBLU is hedged against rising oil prices. Just a FYI.
Oversold can always get more oversold. I have fair value around $5.75-$6.00. HAWK
I think institutions are pushing the pps down and accumulating at this level. We'll see teens again by summer 2024 (or much sooner).
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