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"One of United Continental’s Largest Shareholders Declares Activist Position"

"One of United Continental’s Largest Shareholders Declares Activist Position"

Old Jan 27, 16, 12:20 pm
  #16  
 
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Originally Posted by channa View Post
Remember that Oscar represents a significant change to what United Continental's investors were told for the past several years.

While many of us believe that Smisek's strategies were doomed, it's not clear that the United Continental shareholders believed the same. It's very likely, as evidenced by this, that there is some discontent among them, and they do not agree with the new direction that Oscar is going down.

Especially after Hunter Keay's comment the other day, it's clear that many of them want cash out from United Continental Holdings rather than long-term growth and performance of UAL.
From a friend on Hunter Keay: "Hunter Keay has gone from 'you guys suck revenue is falling' to 'zomg shareholders demand your sweet sweet cash' in the space of two quarters. That guy is a complete dumb———"

(He was also the guy who suggested AA should start charging for soda last year because EVERYONE SHOULD BE SPIRIT).

Originally Posted by nunusguy View Post
If the gigantic UAL/CAL and AA/United-Airways combos didn't provoke an anti-trust response from the Feds, why would it if it involved much smaller carriers like JB or Alaskan ?
For the same reasons that when UA attempted to buy USAir, it proposed spinning off USAir's DCA operation into DC Air — market domination.

The Justice Department is already challenging UA over alleged anti-competitive practices at Newark, I can't see them signing off on allowing UA to further expand its presence in NYC. Same goes for Alaska, you'd have one airline with a significant or dominating position in almost every major market on the West Coast (SEA, PDX, SFO, LAX).

Last edited by WineCountryUA; Jan 27, 16 at 1:16 pm Reason: merging consecutive posts by same member -- please use multi-quote
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Old Jan 27, 16, 1:07 pm
  #17  
 
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******I have zero experience with institutional stock owners*******

But does Altimeter really swing any significant weight here (other then fodder for WSJ et al)?

My quick check shows they are 10th in instutional shares @ ual, and the top position holders are around 2.5x what Altimeter holds. Plus UAL makes up a significant portion of Altimeters holdings (they seem to be heavily vested in transportation).

Granted, they will sneeze more clout with UAL then I could ever have.... so compatitively: I am out.

But does the "declaration" mean anything?
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Old Jan 27, 16, 2:57 pm
  #18  
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Originally Posted by nunusguy View Post
Altimeter disclosed a 3.1% stake in United and said it has engaged in discussions with fellow United shareholders about various aspects of United’s strategic direction. Altimeter said specifically that it talked to PAR Investment Partners about that fund’s “strategies to enhance shareholder value” at United.
It's way past time for investors to light a fire under UAL's criminally neglectful BOD. But a shareholder revolt in the name of "value enhancement" doesn't pair well with UA's urgent need to reinvest in product and win back customers who will buy premium fares.

This is one of those times when the methods Wall Street prescribes to get what it wants ironically makes those goals harder to achieve.

Originally Posted by ndhapple View Post
From a friend on Hunter Keay: "Hunter Keay has gone from 'you guys suck revenue is falling' to 'zomg shareholders demand your sweet sweet cash' in the space of two quarters. That guy is a complete dumb———"

(He was also the guy who suggested AA should start charging for soda last year because EVERYONE SHOULD BE SPIRIT).
Part of bold corporate leadership, whether you're Herb Kelleher or Craig Jelinek at Costco or whomever, is knowing when to tell the Hunter Keays of the world to get lost so you can build a sustainable company.
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Old Jan 27, 16, 3:38 pm
  #19  
 
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Originally Posted by EWR764 View Post
An activist investor movement at UAL would not be a good thing for frequent flyers. I suspect this has less to do with the fact that the company is underperforming DL in operational and revenue metrics and more to do with the sentiment that United appears to be pulling back from its stance on returning capital to its investors through stock buybacks and a long-term dividend ... though all these factors are tangentially related, to be sure.

I think Hunter Keay's exchange with Oscar offers a great deal of insight into the position the activist investors likely hold:



During the call, Oscar did not take the bait, which I think raised a few eyebrows -- and the ire -- of investors who now feel threatened by the prospect of UAL dialing back its momentum of returning capital to shareholders and instead (possibly) deploying more back into the enterprise.

It will be an interesting fight to watch.
+100 This is exactly what is happening. Hunter did a lot of damage over the last 4 years with the "follow Spirit" chearleading and game plan he (and a few other street fools) pressed Jeff to follow. Now, with is lackey gone, he wants to strip out capital, to force a further diet on UA.

However, failure of his game plan has evidently not slowed him down.

Originally Posted by ndhapple View Post
From a friend on Hunter Keay: "Hunter Keay has gone from 'you guys suck revenue is falling' to 'zomg shareholders demand your sweet sweet cash' in the space of two quarters. That guy is a complete dumb———"

(He was also the guy who suggested AA should start charging for soda last year because EVERYONE SHOULD BE SPIRIT).

Part of bold corporate leadership, whether you're Herb Kelleher or Craig Jelinek at Costco or whomever, is knowing when to tell the Hunter Keays of the world to get lost so you can build a sustainable company.
+1000 Letting an undergrad Biz grad from Bucknell University run the show like Jeff did is a roadmap for disaster.
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Old Jan 27, 16, 7:06 pm
  #20  
 
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Originally Posted by spin88 View Post
+100 This is exactly what is happening. Hunter did a lot of damage over the last 4 years with the "follow Spirit" chearleading and game plan he (and a few other street fools) pressed Jeff to follow. Now, with is lackey gone, he wants to strip out capital, to force a further diet on UA.

However, failure of his game plan has evidently not slowed him down.

+1000 Letting an undergrad Biz grad from Bucknell University run the show like Jeff did is a roadmap for disaster.
I think people forget that sell-side analysts and management consultants are two very different groups of people that are not interchangeable. Sell-side analysts (or buy-side for that matter) don't work for the airline. They don't provide advice to the airline. They don't provide recommendations to the airline. They're much like FlyerTalkers: obsessively following every move an airline makes. Unlike FlyerTalkers, they have clients/investors who pay them for their opinions. Analysts do get to ask management questions 4-6 times per year.

I understand it's easy to read a pointed question and think the analyst has an ulterior motive to influence the airline's management. The thing is, neither party has anything to gain from that.

So, to summarize: analysts don't run the show.

P.S. I don't know what an ad hominem about education has anything to do with the point being made.

Last edited by fly18725; Jan 27, 16 at 9:10 pm Reason: Clarification
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Old Jan 27, 16, 8:31 pm
  #21  
 
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Originally Posted by fly18725 View Post
.

I understand it's easy to read a pointed question and think the analyst has an ulterior motive to influence the airline's management. The thing is, neither party has anything to gain from that.

So, to summarize: analysts don't run the show.
Mr Keay's question to Mr Munoz, although awkwardly phrased, didnt seem to me to have an ulterior motive. As a matter of fact, he was rather straightforward-will you commit to returning money to the shareholders for 2016 versus investing that cash in the enterprise to improve future prospects?

Fortunately it appears that Mr Munoz has a vision for UAL beyond 90 days.
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Old Jan 27, 16, 8:39 pm
  #22  
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I don't know why anyone would listen to a bozo with no vested interest in the company. Analysts aren't customers (more than any other customers), nor do they tend to actually own stock.

I certainly wouldn't pay some guy for his "analysis", its worth gornischt.
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Old Jan 27, 16, 9:04 pm
  #23  
 
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Analysts are just that..."analysts." Nothing more. They research, write reports and, sometimes, are allowed to speak. They are not managers, investors or visionaries.
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Old Jan 27, 16, 9:06 pm
  #24  
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Originally Posted by jhayes_1780 View Post
But does the "declaration" mean anything?
No. It's just a ploy that some people use to try to get the board to listen to them. Any self-respecting board will just ignore them.
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Old Jan 28, 16, 12:01 am
  #25  
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Originally Posted by mahasamatman View Post
Originally Posted by jhayes_1780 View Post
....
But does the "declaration" mean anything?
No. It's just a ploy that some people use to try to get the board to listen to them. Any self-respecting board will just ignore them.
No completely meaningless -- believe any holder of 5% equity of a publicly traded corporation must file with the SEC and the corporate.
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