Let's get back to the topic of the thread.
1. I doubt the Colgan situation had anything to do with the stock price of Pinnacle--very few could make the connection.
2. In case you've been in hibernation, all airline stocks are down.
3. However, the cap rate makes them a prime target for acquisition, as they have long term value with their contracts with NWA/Delta.
4. I am quite sure the stock price has caught someone's attention in southern Utah that is sitting on a Ft. Knox pile of cash!
5. However, should the stock price drop much further, it may be to the benefit of their Mainline partner to do a stock swap and acquire them without the outlay of one penny.
Why? Because it could be quite possible from a cost standpoint, that acquiring them through a stock trade, and then owning the contract, would be a cheaper way to dispose of more 50 seat flying, without the threat of a lawsuit for abbrogating a 15 year, or what's left of it, contract.
6. It amounts to a very cost efficient way to BUY-OUT a contract.
7. This raises the question: How much would it cost to do the same at Mesa at 4 cents a share? And then--POOF, vaporized!
8. Actually, the Mainline partner would only have to acquire a controlling interest--not the whole enchilada!
