radarlove
Well-known member
- Joined
- Mar 21, 2005
- Posts
- 677
I heard rumors that UAL was having a lot of trouble with liquidity. With the recent news that LUV had to borrow at a 10.5% interest rate (yowza!) with stellar credit and a strong balance sheet, I wonder if the capital markets are simply closed to UAL.
A year ago, I would have thought that a UAL liquidation was a fantasy, but I also would have thought that LUV borrowing above 10% was a fantasy too.
Less than a year ago, UAL's market cap was some $400 million, yet the unrestricted cash in the band was $1.8 billion. So you could buy the whole airline, throw away all the physical assets and still have $1.2 billion profit.
Of course, you really couldn't, that ignores the debt, but don't you think UAL should trade for at least the value of the cash in its checking account?
A year ago, I would have thought that a UAL liquidation was a fantasy, but I also would have thought that LUV borrowing above 10% was a fantasy too.
Less than a year ago, UAL's market cap was some $400 million, yet the unrestricted cash in the band was $1.8 billion. So you could buy the whole airline, throw away all the physical assets and still have $1.2 billion profit.
Of course, you really couldn't, that ignores the debt, but don't you think UAL should trade for at least the value of the cash in its checking account?