11Jun07 - LCC stock below $30 per share

[ussnark]

And, when they used to think the company is worth $60/share, and now they think it is worth $28/share, the company has a serious problem.

While we all know US has many serious problems, some flight safety related, but there is another way to look at the situation, that there may simply be other opportunities that people perceive will yield better returns. The price of fuel(and beating war-drums to invade Iran) is one item that most any investor would look at and say, well, maybe I should take my money from the airline industry and go elsewhere, for now. Phd in economics not needed.

For instance, with the recent doubling of foreclosures in many areas, income property is becoming somewhat attractive.

Just another way of looking at the glass half-full, half-empty or glass is too big thingy.

 

[phasersonstun2]

I think that if anyone were challanging the east's claim of running the company into the ground; they should take note of this. This is one of several warning signs that this company is in real trouble.

In think every single time in this company's past when the stock dipped below $30/share-the thing just sank like there was no tommorrow. I don't recall a single instance when it rebounded.

I can. In 1994 the stock price hit 4. If you were to have purchased 10,000 shares at anywhere near that price, then waited until 1998 when it hit 60... well you do the math.

 

[usair_begins_with_u]

there may simply be other opportunities that people perceive will yield better returns.

You'd have made a better return by flushing 1/2 of your money down the toilet and doing nothing else than investing long in LCC.

By my crude calculations, it would have been damn near impossible to do any worse than flushing that much money down the commode even if you really really tried.

 

[MiAAmi]

LCC closed at $27.61 on 15JUN. With UA open to mergers could the low stock price at LCC be attractive to bidders? And could this start a new round of merger talks?

 

[Pylit]

A company's stock price is the report card of the CEO and the executive officer of the company.
Looks like a D average so far and sinking fast....
Will he have to repeat the course or just flunk out and leave?

 

[Pylit]

"...why break a sweat pointing out all the shortcomings when Stevie Wonder can see them?" PineyBob

So eloquently stated. I've always puzzled why glaring deficiencies apparently unnoticed by higher-ups always stand out like the proverbial 'sore thumb' to me, one of the unwashed and unannointed.

 

[Be Careful What You Wish For.]

While I respect PB's opinion I pose this question- why are we valued higher then DAL? (I am not a company minion.)

 

[BoeingBoy]

why are we valued higher then DAL?

LCC's market cap (the value of all stock issued) is over $1.2 billion less than DL as of Friday's close.

Jim

 

[Be Careful What You Wish For.]

Man you are on the ball! (And fast to!) I like it!

 

[BoeingBoy]

I try.....

Jim

 

[Be Careful What You Wish For.]

I try.....

Jim

Not to joust with you but all things being priced out eqaully?(pardon the cocktails) would not LCC stock be valued at a premieum?(God help us all) to DAL(ala Berkshire at some astronomical sum.)?

 

[BoeingBoy]

If I understand right, yes. If both DL and US had equal values as companies, in a perfect world US stock would be worth more per share than DL stock since there's less US stock than DL stock outstanding - about 90 million vs 200 million shares. Of course, stock prices are affected by a lot of factors besides the intrinsic value of the company.

Jim

 

[brokenwrench]

If I understand right, yes. If both DL and US had equal values as companies, in a perfect world US stock would be worth more per share than DL stock since there's less US stock than DL stock outstanding - about 90 million vs 200 million shares. Of course, stock prices are affected by a lot of factors besides the intrinsic value of the company.

Jim

Per Ed Bastian EVP&CFO at Delta, Delta has 400 million outstanding shares. At $19 bucks a share that puts DL market cap around $8B.

 

[BoeingBoy]

I had seen the 400 million shares mentioned before also, but Yahoo (where I took a quick look to answer the previous question) just shows 197+ million outstanding. Don't know if Yahoo is wrong or the rest are authorized but not yet issued. Either way, DL's market cap is higher than US'.

Jim

 

[usair_begins_with_u]

Take a look at the balance sheet. LCC: $8.8 Billion in liabilities, $8.4 Billion in assets. Only $5.9 Billion of the assets are tangible. LCC has negative equity.

I can't understand how LCC can trade at 8 times earnings. Should be in the 4-5 times earnings range and trading right around the mid teens. LCC is NOT a growth stock, and it doesn't pay dividends. I have no idea what these crazy investors are thinking. I'm short LCC until it reaches 15, then DL will buy LCC, slice and dice it, and dump the leftovers.

At $30 a share, would you rather have one share of LCC, or one share of micrsoft? Which do you think will be worth more 5, 10 years from now?