Jet Blue stock takes a dive !

frank rizzo

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Yep that stock was over inflated to begin with walltstreet firms have shot the value down those airbags are going to bite them in the ass down the road !
 

Jeff G

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Let's see: $27 --> $55 --> $50, in less than a month. Yep, it's a massacre.
 

sydeseet

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The dow is down from a month ago too. Wierd.
 

Prop Trash

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...like Continental's CEO, Gordon Bethune, said: "P.T. Barnum coined a phrase to describe the people who bought their stock." I think he is referring to the phrase "there's a sucker born every minute."
 

pilotyip

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Pull back

a pull back is standard before an even bigger bounce up, now is the time to buy.
 

vja217

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Bethune

I can't wait to hear what Gordy has to say about his forthcoming IPO, when he spins off Coex (great airline, great people, wouldn't touch the stock with a 10 foot pole). I think he's just a little jealous that his across town rival is so hot and that he didn't get in himself...

Max
~bought in at 27 and still flying high
 

Jeff G

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I can't wait to hear what Gordy has to say about his forthcoming IPO, when he spins off Coex
Vja, CoEx was spun off the week after JetBlue went public, as ExpressJet Holdings (XJT). Its IPO went for $16 and is now trading at $14.03. Does that answer your question? :)
 

vja217

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You are absolutely right... I guess I should be paying more attention!!! So what happens if XJT goes below $5? I'm trying to get the facts from some rumors that CAL would buy the remaining stockholders out? Anyone know?
Max
 

dgs

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Let's keep this in perspective folks. After its first year, LUV closed at 1.9x the IPO price. We got there in less than a month after a record-setting IPO day. Our business plan is solid and we are still making money like nobody else can. All our stats continue to look good as we've doubled in size and service from this time last year. Our customers are happy and cities are begging us to come. Let's ride the ups and downs of the open market and see where we end up in a year. I expect we will have set several more records along the way.
 

dgs

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Who do you believe?

Most of the selloff was the result of statements by UBS Warburg analyst Samuel Buttrick, who advised his clients to sell. Not everybody agrees. How can he go wrong with that advice, since everybody can sell today and make a profit. Of course, there's more money to be made in the long run--if you want to wait. Here's an article that presents both sides of the story:

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JetBlue shares dive on mixed reviews
By Jennifer Waters, CBS.MarketWatch.com
Last Update: 1:05 PM ET May 7, 2002

NEW YORK (CBS.MW) - It was proving to be a blue day for the red-hot stock of JetBlue Airlines Tuesday after two analysts launched coverage of the upstart carrier with mixed reviews.

On one hand, Merrill Lynch analyst Michael Linenberg sees a 12-month price target of $62 a share and urged clients to stock up the shares. UBS Warburg analyst Samuel Buttrick thinks otherwise, predicting the stock will level at $38. He's telling his clients to lighten up their holdings of the two-year-old airline.

Investors mostly sold relatively small chunks of shares and drove the stock's intra day price down as much as 10 percent. At last check, JetBlue (JBLU: news, chart, profile) shares were down better than 8 percent, or $4.59, to $49.91 - it's deepest one-day decline.

Of course, the stock's only been trading for three weeks, but the jumps have been much more noteworthy than the drops. Since breaking out April 12 at $37.42, JetBlue shares have soared above 47 percent to a high of $55.15.

Despite their disparate investment opinions, Linenberg and Buttrick agree on a number of points: that JetBlue is unbelievably profitable given the economic environment and the industry struggles, and that it is the fastest-growing airline in the U.S.

The numbers tell the story. In the March quarter, JetBlue earned 34 cents a share - a whopping 161 percent higher than the year-ago period - on revenues that were nearly doubled at $623 million. Its operating margin was a robust 17.5 percent against an industry average of 13.5 percent. Over the next five years, both analysts see profitability clipping ahead by at least 25 percent.

JetBlue differentiates itself from the pack with what Linenberg summed up as "low fares, but frills included." The neatest extra is by far the TVs at every seat, with 24 live channels.

The carrier, whose major hub is New York's JFK Airport, with a new West Coast base recently added in Long Beach, Calif., undercuts its major competitors from 30 percent to 80 percent. It can because costs per seat are 30 percent lower than industry levels, thanks in no small part of lower unit labor costs and higher use of its jets.

It helped JetBlue, too, that it was the "best-funded start up in U.S. airline history," Linenberg said. The airline was dispatched with $175 million of start-up funding. Since the IPO, JetBlue is sitting on $260 million in cash and a debt-to-capital ratio of 66.7 percent - far better than the industry average of 90 percent.

While that bolsters Linenberg's arguments for stock performance improvement and his buy recommendation, Buttrick sees a limited upside.

Linenberg agrees that the potential appreciation over the next 12 months will be "relatively modest" compared to the last four weeks. Yet he still sees acceleration of 15 percent to 20 percent.

Buttrick, on the other hand, points out that airlines are a risky business with only eight of the last 27 carriers to make it public still flying. More than half of them ended up in bankruptcy.

"We used to think that investing in start-up airlines was the single worst investment strategy going," Buttrick said. "That was before the Internet.

"We believe that JetBlue is the exception," he added. "We also know that it's an airline."

And as such, is subject to all the pratfalls of the industry, such as aggressive competition, rising energy prices, the vagaries of any labor force, and the risks of flying planes.

"There will be missed quarters," Buttrick said. "There will be competitive incursions. There will be volatility in oil prices.

"Lastly, anywhere near current prices, we presume there will be additional stock offerings," he said. "For all these fairly obvious reasons, it is inappropriate to entirely divorce JetBlue from its more earthbound discount airline brethren."

Considering that "the lesser luminary comparables" are trading at seven times to 24 times earnings, he's putting his price target at 24 times earnings, or $36-$38 a share.
 
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