SWA SEC 8-K 19Sep07 . . . thoughts?

[Skank]

You use it to buy back shares, hence returning cash to the shareholders, which is what corporations are supposed to do.

What about manufacturing a product or providing a service? Does that come in to play somewhere?

 

[AlbieF15]

What about manufacturing a product or providing a service? Does that come in to play somewhere?

Tsk Tsk. She's a witch! Heretic! Burn her!

 

[STL717]

Like I said earler, dirtying up the balance sheet.

I like the move. Gary Kelly is in this for the long run, not propping us up to drain the cash and run.

Gup

Buying an airline would dirty up the balance sheet.

 

[Whataburger]

We've heard many people say we will increase our bottom line by $1Bil in the near future. I think we buy GAL, use the 757s for Hawaii, sell 737s, use the wide bodies for cargo. It's no secret, cargo=big cash.

 

[GuppyWN]

Hell, I'm in! You don't just borrow 1/2 BILLION dollars to pay interest on it.

Now. Who is REALLY the target? Honestly I think you guys are thinking on too small a scale.

Gup

 

[mbd]

Aren't they simply borrowing the money to buy the 16 aircraft next year? Getting a good rate at approx 6% interest.

 

[328dude]

We have ordered up another batch of 737's a few month's back with later delivery dates. (Can't find the article) All orders up to that point (2010) I think, are already paid for.

 

[Dirty Sanchez]

There is nothing wrong with debt financing, especially with the declining interest rates. The funds could be used for a variety of purposes, including stock repurchase.

 

[PCL_128]

Hell, I'm in! You don't just borrow 1/2 BILLION dollars to pay interest on it.

Now. Who is REALLY the target? Honestly I think you guys are thinking on too small a scale.

What do you have in mind? Personally, I can't imagine SWA management being stupid enough to try to merge a legacy carrier, or even another large LCC. Personally, I think this is nothing but getting their hands on some cheap money while the interest rates are down so they can make a large aircraft purchase or stock buy-back program. I just don't see any large-scale mergers in SWA's future.

 

[GuppyWN]

I agree. Everybody was going merger/buyout crazy so I just thought I'd gas up the fire.

Personally, I think it's nothing more than ledger entries to make us less a target for a LBO and to have a little cash on hand "just in case".

Gup