LUV stock

[roughneck]

Anybody have an idea when SWA stock usually splits (what value)? The stock looks like it will break $20.00 in the near future if things continue like they are.

I had heard from several sources that the day the stock hits $20 again there will be lots of folks calling in rich.

Just wondering if the stock might split before that happens?

Lets hope whatever happens, that lots of folks call in rich and retire.

 

[Andy Neill]

There have been 12 stock splits since the first one in Mar 78. Someone holding an original share would now have 240.27 shares.

The last two times it split (20 Jul 1999 and 16 Feb 2001) the stock was $20.28 and $20.49 respectively theday before the split.

I hope you realize that a stock split creates no new wealth but does make it more attractive to people who don't want to buy stocks priced above $20. If you hold 100 shares at $20 and it goes through a 2:1 split, you will be holding 200 shares at $10. Each are worth $2000 but the $10 MIGHT be more marketable when the psyche of the investor is factored in.

 

[roughneck]

Thanks for the info on the last stock splits.

I understand how it works. It just might be easier for someone to sit on double stock at $10.00 a share (because of the potential for quick growth) than it is for them to stay around if they can cash out at $20.00 a share and retire.

Thanks for the info though.

 

[Andy Neill]

OK, explain to me how a stock at $10/share has greater potential for growth than a stock at $20/share.

As a point of interest, the last time JetBlue stock split (Dec 13, '02) it was trading at $39.75. It's closed above that level for the last 9 trading sessions.

 

[roughneck]

Easy, I can afford to buy a few shares of stock at $10 but can't afford to buy a few at $20. I would assume that this is the case for some others. Thus you tap into a different set of investors, thus more stock is bought, thus the demand goes up, thus the price goes up.

 

[Andy Neill]

I wonder why they don't make a 20:1 split, drop the price to $1/share and let MORE folks in on the action then. Sounds like a fool's game to me.

 

[Bill Nelson]

you ought to be in the game then Andy.

 

[SWA/FO]

BUY, BUY, BUY!!!!!

I thought JBLU would split but it looks like they want to issue more stock. I say SPLIT, SPLIT, SPLIT!!!! GO SWA!!!!

 

[MLBWINGBORN]

Well..

First off..
There is no way you can compare the history of SWA to JBlue..

Second..
While its true that a stock split doesnt create instant gain or wealth..The history of SWAs stock has resulted in a huge amount of wealth and gain for many..

The secret is that every time it splits and the price climbs back up to or near the original price you now control more options at a lower strike price..

To give you an idea of what it could mean for some..

40,000 options at 18.15 per option=$726000
40,000 options at strike price of 3.00/your cost=$120000

$726000 selling price
- $120000 option cost
=$606000 profit pre tax

Its not hard at all to find someone that has 30k plus options of SWA stock. I will have control of over 5k options by Sept 2006 without any splits at all..

Just think what a 2 for 1 split 3 or 4 times would mean in say 15 years starting with 5000 options..

Who knows what the future markets may bring but right now im a big fan of the LUV stock price..

The fact that they were free helps too.

Mike

 

[thebluto]

Chase said in an earlier post:

"Retirement Losses for SWA
The following are the numbers through '10.

Yr Pilot Ret.
4 89
5 102
6 155
7 152
8 142
9 108
10 142

Throw in a factor of medical furloughs or other reasons for folks leaving early (rough factor of around 24 per year) these numbers give you a rough idea of the retirement numbers. I just flew with a senior DAL capt who is 4 years shy of retiring but is retiring later this year. If the stock price nears anything in the $25 to $30 range you can expect the early retirement numbers to jump dramatically due to the options & the value they would hold. Some guys who are retiring now with the stock price so low are receiving significantly less in retirement moneies if they are working off their stock options than guys who retired when the price was nearer $25-$30.

hope that helps,

p.s. your assumptions are close to what I've heard the company is using for guidelines for future planning purposes. I've also heard some recent rumblings from fairly good sources that there maybe more new hire classes beyond the May classes. Nothing firm but the discussions are being held.


__________________
chase"



Chase mentioned 25-30$. Where is everyone getting the early retirements for the stock price hitting $20? Is there an actual buzz that many are planning this? Or, is it wishful thinking on our (the SWA wannabees) part? If not, what kind of number of retirements are we talking about here? (18.08 was the last stock quote I saw.)

 

[luv2fly]

I think history has shown that it won't get to $25-30. It will split before it gets that high. Historically anyway! I have been told by a couple senior captains that the $20 mark will trigger quite a few early retirements, their's included.

 

[MLBWINGBORN]

I have flown with alot of folks that have enough to call in rich if and when it hits the 20 to 25 $ mark..

They almost all have said that they dont have enough time left for the stock to recover to the higher price after a split so im guessing several folks...Dont know a real number..Have their "sell all" order in and when it happens they are outta here..

The reasons most often stated for them leaving is they can and the TSA has turned the "job" into a real pain in the a$$..

Mike

 

[klhoard]

I have flown with alot of folks that have enough to call in rich . . <snip> . .

Wow, I just checked the FedEx pilot website . . . I can call in Sick or Well, but not Rich.

Man, I knew I should have gone to that SWA interview. . . .

 

[thebluto]

http://www.iflyswa.com/investor_relations/fs_stock_quote.html