JetBlue Airways sets 3-for-2 stock split

[Cpt. Over]

JetBlue Airways sets 3-for-2 stock split
October 07, 2003 08:44:00 AM ET



NEW YORK, Oct 7 (Reuters) - Low-cost air carrier JetBlue Airways Corp. (JBLU) on Tuesday said its board declared a three-for-two split of its high-flying stock.

New shares will be distributed on Nov. 20 to shareholders of record on Nov. 10. The stock, which has only been publicly traded for 18 months, has more than tripled in price in the past 12 months as the New York company has capitalized on its low cost structure to fuel rapid growth, often at the expense of major carriers.

JetBlue stock closed on Monday at $67.53 on Nasdaq after touching an all-time high of $67.91.

 

[Cpt. Over]

Question regarding this. I will be in initial class starting Oct. 20. How would this effect me. I dont really understand the whole 3 for 2 split etc. Could someone help me fill my investing knowledge void in my brain. Thanks. Cant wait to be on the JetBlue side.

 

[Cpt. Over]

I just found the answer in this example I believe.


This year, the Board of Directors of ABC Corp. decided to declare a 3-for-2 stock dividend. The board declared that each shareholder would receive 0.5 new shares of ABC stock for every share currently owned.

Since you own 55 shares of stock currently, how many shares will you own after the split? The math works like this: Take your 55 shares and divide by 2. That gives you 27.5. Add those 27.5 shares to your original 55 shares, an you now have 82.5 shares of ABC.

I hope this helps. Wait, Im talking to myself...

 

[TonyC]

Originally posted by Cpt. Over [POST #1]
JetBlue Airways sets 3-for-2 stock split

Originally posted by Cpt. Over [POST #2]
Question regarding this. I will be in initial class starting Oct. 20. How would this effect me.

Umm, unless they're handing out JetBlue stock as part of newhire orientation, not at all.

Originally posted by Cpt. Over [POST #3]
I just found the answer in this example I believe.

[blah, blah, blah...]

I hope this helps. Wait, Im talking to myself...

Uh, huh. Did they include the first dose of Blue Koolaid with the offer letter?

Seriously, though, Congrats on the job! And if there are any other voids in your brain (oh, say on flight time limits and rest rules) then you'd better start filling them right away with actual FARs. Because if you don't, JetBlue has a new version they'd like to plant in fertile minds.

Fly Safely!

(And if you ever start to hear yourself answer, be worried. Very worried...)

 

[banger]

Well Pilots do get stock options. So depending when the strike date is set, it might be very important as to when a stock split happens. I believe the timing for this split was done to ensure the Oct pilot class (last of 2003) was onboard and got the options before the split happens.

 

[hopeful]

I highly doubt that the company elected the split date based on a new hire class date that will effect 15-20 pilots. A few thousand options aren't going to be the determining factor when a million shares are on the line.

Stick your tongue out and look at it in the mirror, Looks pretty silly after drinking all the Blue-Aid.

 

[V2+10]

Stick your tongue out and look at it in the mirror, Looks pretty silly after drinking all the Blue-Aid.

I'm sure it looks one heck of alot better than having a BROWN one!!! I can only assume that it tastes better too! Please let us know.

V2

 

[ratherfish]

SELL!

 

[Redtails]

Yes, the company and board of directors can set the split anytime it wants to, especially if it favors the employees. This month there will be a major Crew Stock Purchase, which I know many of the 6000 employees here participate in. So yes, someone who buys 600 shares after the stock split will have 900 in November-- and is only possible due to the timing of this decision. Wow, go figure, a company who cares about the employees!!!

 

[Snoopy58]

The 900 shares will be worth exactly the same as what the 600 were. Stock splits don't create wealth any more than splitting a $20 bill for a 10 and two 5's does. It simply reduces the price of "one share" without reducing the value of anybody's portfolio.

 

[skirt]

I highly doubt that the company elected the split date based on a new hire class date that will effect 15-20 pilots. A few thousand options aren't going to be the determining factor when a million shares are on the line.

Stick your tongue out and look at it in the mirror, Looks pretty silly after drinking all the Blue-Aid.

Whether the rumor is true or not, doesn't really matter, though it does impact significantly more than 15-20 pilots...there are two classes in question, 36 pilots, plus many, many other employees hired in October. The JetBlue leadership really does care enough that it is quite possible this is true.

Why do I know? I'm in the new hire class and just listened to a day and a half of sessions on everything from crew care to values and airline economics to safety taught by none other than David Neeleman (CEO), Dave Barger (President), Al Spain (VP of Ops), Pete Russo (Chief Pilot), Mike Barger (Director of Training), Dean Melonas (Director of Pilot Recruitment) and many others on the leadership team.

To put this koolaid in perspective, I am not a spring chicken, nor am I here because I was furloughed or begging for a job. I came here because I researched this culture up one side and down the other, and made the choice to leave my past employer on my own. No, I was not in danger of a furlough, and no I don't think my past employer is going out of business. I just wanted to work in an environment where the leadership values it's workers and visa versa.

Let me tell you about an experiment I conducted a few months ago that convinced me this move was right for me (I'm not saying its right for everyone, and its not, but for me it was):

I asked the following three questions to 32 random JetBlue crewmembers on both coasts (pilots, flight attendants, customer service agents, mechanics, etc.):

1. Do you feel valued and respected at work?
2. Do you feel you have a voice?
3. Do you like your job?

32 of 32 answered yes to all three questions.

Then I asked the same questions to a similar random sample of "employees" at my former employer. How many said yes to even one of the questions....zero! Ask yourself and your fellow crewmembers these questions. What are their answers? Ask yourself if you like their answers. I didn't,so I left, even though I left significant seniority on the table.

Back to the stock at JetBlue. I think the 3-2 split says volumes about the philosophy here. Most airlines in the hey days would do anything for a short term rise in price. If the JetBlue leadership team were like the others, they would have split it 3-1 or at least 2-1. No, they did a 3-2, which means they don't want the stock to rise so fast. As my husband just said, David Neeleman threw a log on the fire (keeps the fire burning slow and long), not kindling (greed). Scaled, controlled growth are big words here....not explosive.

Maybe I'm drowning in blue koolaid, but my husband is a skeptic's skeptic and even he could read the sincerity in the leadership team's voice. We could see right through their brains in straight into their heart. Its not a pyramid scheme, its not Amway, its not People's Express. As Mike Barger said, "all of us are just 'dudes,' that includes you, me and David. None of us are special, we're all in this together." David Neeleman said "you will feel valued, respected and important in this organization."

Guys and gals this is real. I've spent significantly more than a decade at a major, and been through many, many leadership teams. None have ever been like this. If they are dispensing koolaid, so be it, sure tastes great.



Skirt

 

[BlueBusDriver]

Welcome home

Skirt,

Nice post. Welcome home. Enjoy your time in Miami and see you up at JFK soon.


BlueBusDriver

 

[Cpt. Over]

Nice post Skirt. Thanks for the response everyone. Will see you soon in MIA or online!

 

[jaxgus]

As Usual, You Know How to Say It

Skirt,
It's a pleasure having you on the jetBlue team. It is our gain and your old employer's loss. More importantly, the employees at your previous company have lost the leadership you demonstrate in each of your posts on this board. If the rest of the industry, management and labor, could follow your example everyone would prosper.
Too many individuals spend their time blaming the other "side" as opposed to solving prolems to make their company properous. Unfortunately, they turn to lawyers to solve their problems as opposed to compromising like adults. It is time for the battle of the greedy to end and make this industry stable for all employees. Thank goodness leaders like David, Dave and Herb are bright lights demonstrating airlines can make money and create a positive work environment.
Skirt, I look forward to flying with you and having a chance to buy you a "cold one." Best of luck in MIA.

jaxgus

 

[tkr-toad]

WOW! Shocker!

As anyone can see from my profile, I'm not a prolific poster. However, I'm a heavy lurker and one of my favorite posters here is Skirt. Skirt, your posts are invariably insightful and lucid and you manage to add some measure of calm to the mudslinging that often ensues on this board. I am very surprised to read of your move and am happy you were hired. The seniority was the thing that was surprising but come to think of it, you'll fit right in because the other B6 folks here have the same temperament and approach to things. "Virtually" being exposed to you guys makes me want to work there all the more. While I enjoy posts from a few of you from outside of jetBlue as well, as a whole (of course no one is perfect) I find the Blue crew to best reflect a "culture" which is sorely lacking in buisiness today. Congrats Skirt - I hope your decision fulfills your hopes. (Re-reading this post, it sounds slavishly sappy, but I'm too tired to edit it to sound less wanna-beish).

 

[airbaker]

The 900 shares will be worth exactly the same as what the 600 were. Stock splits don't create wealth any more than splitting a $20 bill for a 10 and two 5's does. It simply reduces the price of "one share" without reducing the value of anybody's portfolio

Very true. However, a split that takes a share down to the $20-30 range, optically enhances the stock for the average Joe. So the pilot new-hire at jetBlue that receives 6000 shares on day one, and turns into 9000 shares a few days later after the split, will probably get a much greater return as the stock rises. Just look at Microsoft. Off the top of my head, an initial $5000 investment in 1986 would equal over $3 million today. That was primarily due to the many, many stock splits; and for the lucky one's that held, their value increased exponentially.

 

[AJWick]

enlightening post skirt...best of luck at JB

great company great planes great concept

 

[crazee8]

Skirt,

Many congrats!!!! I always enjoy reading your posts.

 

[Counselair]

Question regarding this. I will be in initial class starting Oct. 20. How would this effect me. I dont really understand the whole 3 for 2 split etc. Could someone help me fill my investing knowledge void in my brain. Thanks. Cant wait to be on the JetBlue side.

I'm fortunate enough to be in the same boat as Capt. Over, starting ground school on the 20th, and was wondering if anybody knows when the split takes effect. I sure would like to have the stock prior to the split but in reality I'm just happy to be here and am looking forward to many more future splits!

Counselair

 

[Eagleflip]

The stock split includes all those who own stock as of Nov 10th, and takes effect on Nov 20th.

Good luck in training guys/gals!

And Skirt....tough to work out when you're in the Doral Ale House, eh?...