All things STOCKS

#15,026
#15,026
I have a regular meeting with some British guys and my wife said "ask them about their inflation". So I did that today and they do think it's 10%. I'm not sure what their central bank will do, but it's interesting. I saw a headline saying no GDP growth, 10% inflation still. I don't know what is inflating, but it's certainly not energy this time. They told me also there is a lot of striking going on. Inflation 10%, people are not getting cost of living covered.
 
#15,027
#15,027
Firebirdparts said:
I have a regular meeting with some British guys and my wife said "ask them about their inflation". So I did that today and they do think it's 10%. I'm not sure what their central bank will do, but it's interesting. I saw a headline saying no GDP growth, 10% inflation still. I don't know what is inflating, but it's certainly not energy this time.
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Haggis, tripe, and marmite.
 
#15,031
#15,031
Good day to buy discounted equities. They might not do anything for a while, but I see a lot of good names down 3-5% today.

I might regret it, but I’m working on going long regional banks (KRE) (by shorting cash reserved puts). Too risky to pick individual names (Truist, Regions, First Horizon, 5th/3rd).
 
#15,033
#15,033
The cycle of this is just so predictable. Employment numbers good (even if wage growth even or slow, relatively speaking) and everyone prices in another rake hike (which we already knew was coming) and therefore increases odds of a recession (which everyone predicts will be mild).

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#15,039
#15,039
Firebirdparts said:
I always worry about the ol' "Sell in May and Go Away" but I don't really sell in May.
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The algorithms have factored in the possibility of the deterioration in share prices expected by the non-professional retail traders. The trillions in investment capital waiting on the sidelines is a bigger factor.
 
#15,043
#15,043
The Spirit/JetBlue merger recently took a big step forward. JBLU is ending an alliance with American in order to appease regulators and to focus on closing the deal. The law firm involved has a good track record of finishing deals. The Biden administration has tried to block it. Seems like a sketchy move IMO considering that the combined company would still be a distant #5 behind (1) American, (2) Delta, (3) SouthWest, and (4) United. The government is arguing that consumers of bottom of the barrel airline, cheapest seats will be hurt. But SouthWest is ALSO a discount carrier. Combining SAVE and JBLU creates stronger competition for LUV.

There’s still risk, but the arbitrage trade hasn’t popped yet. $31/share cash for each SAVE share ($2.50/share has already been paid - $33.50 total) and SAVE is about $19.50 after some strong days. The deal is supposed to close before the end of 2024. Possible 60% upside. Even if the deal falls apart, SAVE has value as a stand alone. AND they’d collect a significant fee for the deal falling apart.
 
#15,044
#15,044
I think that the fee to SAVE from JetBlue is the same as their offer in June 2022:

JetBlue has upped its own reverse break-up fee to $350 million, or $3.20 per Spirit share. This is to be paid in case the transaction is not fulfilled due to antitrust reasons, meaning if regulators were to block it.
 
#15,045
#15,045
Thunder Good-Oil said:
I think that the fee to SAVE from JetBlue is the same as their offer in June 2022:

JetBlue has upped its own reverse break-up fee to $350 million, or $3.20 per Spirit share. This is to be paid in case the transaction is not fulfilled due to antitrust reasons, meaning if regulators were to block it.
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Wasn't JBLU gonna pay an amount for every month the deal didn't go through? Was Antitrust govt blockage an escape route?
After years of not owning airline stocks I now own both JBLU and SAVE. Profitable at the moment.
 
#15,049
#15,049
Go aeiou said:
Wasn't JBLU gonna pay an amount for every month the deal didn't go through? Was Antitrust govt blockage an escape route?
After years of not owning airline stocks I now own both JBLU and SAVE. Profitable at the moment.
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JBLU has paid $0.10/share for every month that the deal hadn’t closed. They’ve paid that January through June (just a week and a half ago). The press releases do not spell it out clearly, but there is a comment that they would potentially be paying a total of $34.10. So $31 left plus $2.50 already paid plus $0.10/month for 6 months equals $34.10. I’m guessing that the $0.10/share just ended, but again - they do not communicate very well to the shareholders. But it sure looks like it would be very expensive to not close the deal and by giving up the American Airline alliance JBLU seems determined to make the deal happen.

The $350 million fee is owed to SAVE shareholders even if the government blocks the deal.
 
#15,050
#15,050
I just don’t see the reason why there is still a 60% upside available if the deal goes through. Even if it falls apart, it seems like SAVE should be valued around where it is right now.

I don’t see how the government can block the 6th and 7th largest airlines from combining to become the 5th largest. How could that possibly be a problem? And JBLU is footing the legal costs to fight the Biden administration over it.
 
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