Monday, March 19, 2018 9:25:50 AM
High-Flying Canada Jetlines Ltd (CVE:JET) Crashes On Unsettled Guidance
— BENJAMIN A. SMITH
NEWS TRANSPORTATION
High-Flying Canada Jetlines Ltd (CVE:JET) Crashes On Unsettled Guidance
— BENJAMIN A. SMITH
MARCH 14, 2018 0
SHARE
Retail trading darling Canada Jetlines Ltd (CVE:JET) (OTCQB:JETMF) has finally hit the wall. Shares of the ultra-low cost airline carrier—which had risen over 118% since February 5—crashed today on unsettled corporate guidance. Traders who invested late will be playing catch-up for the foreseeable future.
The antagonistic news was disseminated by Canada Jetlines after yesterday’s close. While the company reiterated their diligently in pursuing several initiatives required for the start-up of operations, they also reaffirmed it would not attain a June 2018 start-up date as previously projected. That one sentence was all investors needed to hit the panic button.
If investors were hoping that somehow this press release would go unnoticed, there were sadly mistaken. Canada Jetlines crashed right from the outset, opening the session below $1/share, down 44.98%. Volume is exceedingly heavy, with 7.63 million shares trading hands as of this writing. That compares against an average daily 3-month volume of around 1.41 million shares/day. The company could easily exceed the latter figure by 10-times, which is usually indicative that momentum/spec traders have given up.
With the air firmly out of the balloon, the focus now shifts to “what next”?
Long Term Investors Sticking by Canada Jetlines?
Whether longer term investors have lost confidence is open for debate. From our perspective, it wouldn’t seem so—although we don’t follow the name closely enough to qualify an expert opinion. The press release was filled with positive accomplishments accrued by the company over the past year. Aside from the inability to secure definitive aircraft delivery dates, the remaining business plan is seemingly intact. So from that standpoint, the corporate update wasn’t a complete disaster.
Some of positive highlight include:
Appointment of Mr. Stan Gadek as Chief Executive Officer (former CEO of Sun Country Airlines and Senior Vice President Finance, Chief Financial Officer and Treasurer for NYSE listed, AirTran Holdings). Very experienced industry leadership.
Arrangements to offer service at several Canadian airports; more airport agreements are expected to be announced in the second quarter of 2018.
Jetlines substantially advanced the licensing process with the ongoing preparation of manuals and documentation required for the Air Operator Certificate.
Advanced the financing process by providing detailed materials to interested investors and its investment bankers.
Jetlines commenced trading on the OTCQB under the stock symbol JETMF. This opens up access to U.S. investors and allows Canada Jetlines to better utilize the foreign ownership exemption.
Jetlines assembled a world class aviation board of directors with experience from some of the world’s best ULCC carriers including Wizz Air, easyJet and Spirit among others.
In light of these accomplishments, it’s unfortunate that a start-up delay cratered the stock price so vigorously. But that’s what happens when momentum/spec money starts infiltrating a stock. One missed expectation or data point, traders all rush to sell simultaneously. Very few traders stop to ask the right questions.
Except the longer term investors of course.
Technical Take (Areas To Watch)
Note: Canadian Jetlines Ltd is the heaviest trading stock on the TSX/CVE today. Approximately 8,779,856 shares have traded hands as of 12:00pm EST.
https://www.midasletter.com/2018/03/high-flying-canada-jetlines-ltd-crashes-on-poor-guidance/
.
— BENJAMIN A. SMITH
NEWS TRANSPORTATION
High-Flying Canada Jetlines Ltd (CVE:JET) Crashes On Unsettled Guidance
— BENJAMIN A. SMITH
MARCH 14, 2018 0
SHARE
Retail trading darling Canada Jetlines Ltd (CVE:JET) (OTCQB:JETMF) has finally hit the wall. Shares of the ultra-low cost airline carrier—which had risen over 118% since February 5—crashed today on unsettled corporate guidance. Traders who invested late will be playing catch-up for the foreseeable future.
The antagonistic news was disseminated by Canada Jetlines after yesterday’s close. While the company reiterated their diligently in pursuing several initiatives required for the start-up of operations, they also reaffirmed it would not attain a June 2018 start-up date as previously projected. That one sentence was all investors needed to hit the panic button.
If investors were hoping that somehow this press release would go unnoticed, there were sadly mistaken. Canada Jetlines crashed right from the outset, opening the session below $1/share, down 44.98%. Volume is exceedingly heavy, with 7.63 million shares trading hands as of this writing. That compares against an average daily 3-month volume of around 1.41 million shares/day. The company could easily exceed the latter figure by 10-times, which is usually indicative that momentum/spec traders have given up.
With the air firmly out of the balloon, the focus now shifts to “what next”?
Long Term Investors Sticking by Canada Jetlines?
Whether longer term investors have lost confidence is open for debate. From our perspective, it wouldn’t seem so—although we don’t follow the name closely enough to qualify an expert opinion. The press release was filled with positive accomplishments accrued by the company over the past year. Aside from the inability to secure definitive aircraft delivery dates, the remaining business plan is seemingly intact. So from that standpoint, the corporate update wasn’t a complete disaster.
Some of positive highlight include:
Appointment of Mr. Stan Gadek as Chief Executive Officer (former CEO of Sun Country Airlines and Senior Vice President Finance, Chief Financial Officer and Treasurer for NYSE listed, AirTran Holdings). Very experienced industry leadership.
Arrangements to offer service at several Canadian airports; more airport agreements are expected to be announced in the second quarter of 2018.
Jetlines substantially advanced the licensing process with the ongoing preparation of manuals and documentation required for the Air Operator Certificate.
Advanced the financing process by providing detailed materials to interested investors and its investment bankers.
Jetlines commenced trading on the OTCQB under the stock symbol JETMF. This opens up access to U.S. investors and allows Canada Jetlines to better utilize the foreign ownership exemption.
Jetlines assembled a world class aviation board of directors with experience from some of the world’s best ULCC carriers including Wizz Air, easyJet and Spirit among others.
In light of these accomplishments, it’s unfortunate that a start-up delay cratered the stock price so vigorously. But that’s what happens when momentum/spec money starts infiltrating a stock. One missed expectation or data point, traders all rush to sell simultaneously. Very few traders stop to ask the right questions.
Except the longer term investors of course.
Technical Take (Areas To Watch)
Note: Canadian Jetlines Ltd is the heaviest trading stock on the TSX/CVE today. Approximately 8,779,856 shares have traded hands as of 12:00pm EST.
https://www.midasletter.com/2018/03/high-flying-canada-jetlines-ltd-crashes-on-poor-guidance/
.
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