JetBlue Flying Too High? MSNBC Article
May 10, 2002, 1:02 pm
#1
Original Poster
Join Date: Aug 2000
Location: Some where in the Mountains
Posts: 5,332
JetBlue Flying Too High? MSNBC Article
May 10 — Isn’t it remarkable how, after all this time, and all these losses, and all the pain and suffering undergone by all those many investors in the IPO bubble of the 1990s, one can still find among us, in this hour of our misery, enough chumps willing to give it one last Hail Mary try, so that we may still behold situations like the one that has now developed in JetBlue Airways?
WELL, WHAT ELSE CAN you say when a company with a grand total of 24 aircraft and an 8 percent operating margin, should be priced at roughly one-sixth the market value of the most overvalued air carrier in the business, Southwest Airlines Co., which nonetheless has 15 times as many airplanes, 17 times as much revenue, 23 times the profits, and a much better operating margin?
Put slightly differently, is a dollar of next year’s earnings by JetBlue really worth somewhere around 33 percent more, give-or-take, than a dollar of next year’s earnings from from Southwest — especially when the analysts’ community on Wall Street (if you’ll pardon the expression) thinks Southwest will actually be growing at a faster clip?
Link to complete article....
http://www.msnbc.com/news/750329.asp
WELL, WHAT ELSE CAN you say when a company with a grand total of 24 aircraft and an 8 percent operating margin, should be priced at roughly one-sixth the market value of the most overvalued air carrier in the business, Southwest Airlines Co., which nonetheless has 15 times as many airplanes, 17 times as much revenue, 23 times the profits, and a much better operating margin?
Put slightly differently, is a dollar of next year’s earnings by JetBlue really worth somewhere around 33 percent more, give-or-take, than a dollar of next year’s earnings from from Southwest — especially when the analysts’ community on Wall Street (if you’ll pardon the expression) thinks Southwest will actually be growing at a faster clip?
Link to complete article....
http://www.msnbc.com/news/750329.asp
May 10, 2002, 9:44 pm
#2
Join Date: May 2001
Location: TX again
Programs: DL, Marriott, Hilton
Posts: 360
Ah, the power of speculation. If I'm very lucky the stock will soar to triple digits, then much like a ballistic missle at its apex the curve and arch indicating its downward flight will find me shorting the stock for all its worth. You gotta love capitalism.
In the meantime I love coffee and will even pay a premium for some of the good stuff but even the best coffee is not worth $10 or more for a cup of mojo even if it is the best in the world as so it is with JetBlue. Even if they have a great business model I think the stocks price has more to do with more buyers and not enough stock to go around.
What goes up must come down though eventually if successful in 10 years the current price may very well be considered a fair price.
In the meantime I love coffee and will even pay a premium for some of the good stuff but even the best coffee is not worth $10 or more for a cup of mojo even if it is the best in the world as so it is with JetBlue. Even if they have a great business model I think the stocks price has more to do with more buyers and not enough stock to go around.
What goes up must come down though eventually if successful in 10 years the current price may very well be considered a fair price.
May 13, 2002, 1:23 am
#3
Join Date: Aug 1999
Posts: 749
Might also be of interest:
http://money.iwon.com/ht/nw/bus/2002...n12260571.html
UBS Warburg (UBSZn) made history earlier this week: It
publicly told investors to sell shares of a company it just had helped bring public.
http://money.iwon.com/ht/nw/bus/2002...n12260571.html
UBS Warburg (UBSZn) made history earlier this week: It
publicly told investors to sell shares of a company it just had helped bring public.
