Merged: Virgin Blue Share Price - how low can it go and for how long?
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airtags,
Congratulations on delivering such a pithy summary of the DJ mess. The one aspect you didn't mention is the 'panic' and emotion that affects stock values when traders and investors (speculative and otherwise) perceive that a particular stock has become a 'dog' in the market and this aspects was demonstrated spectacularly with the Virgin stock implosion last Friday during the final trading session.
Congratulations on delivering such a pithy summary of the DJ mess. The one aspect you didn't mention is the 'panic' and emotion that affects stock values when traders and investors (speculative and otherwise) perceive that a particular stock has become a 'dog' in the market and this aspects was demonstrated spectacularly with the Virgin stock implosion last Friday during the final trading session.
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Betsy wrote:
Of particular interest was some 16 million shares changed hands at closing of trading yesterday at 48-49 cents. That's some 1.5% of the company. Who could the buyer be??
Of particular interest was some 16 million shares changed hands at closing of trading yesterday at 48-49 cents. That's some 1.5% of the company. Who could the buyer be??
Did you mean this? Panic selling of 16 million+ shares?
It seems to me the trade was purposely timed between the seller and buyer - if someone dumped 16 million+ DJ shares and there was no buyer the share price would've closed way below 48 cents. Could that buyer be Sir Richard? Temasek? QF?
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Betsy,
It is doesn't matter who sold and who bought. What is important is the precipitous decline of the stock price and the uncertain emotions associated with buy/sell decisions on the back of individual interpretation of DJ's financial position and future prospects based on their business plan.
Today's trading might be interesting!!
It is doesn't matter who sold and who bought. What is important is the precipitous decline of the stock price and the uncertain emotions associated with buy/sell decisions on the back of individual interpretation of DJ's financial position and future prospects based on their business plan.
Today's trading might be interesting!!
Perhaps the 16 million + shares traded at the close on Friday had something to do with the TOLL / Virgin offer that went to Toll shareholders? :
As a TOLL shareholder, we received 1 VBA share for each TOLL one owned and were also given the option of buying more. Presumably some people took up that offer and that may explain the huge amount traded in (more or less) one hit?
I seem to recall the date it was to happen was the 22nd Aug.
As a TOLL shareholder, we received 1 VBA share for each TOLL one owned and were also given the option of buying more. Presumably some people took up that offer and that may explain the huge amount traded in (more or less) one hit?
I seem to recall the date it was to happen was the 22nd Aug.
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r,
TOLL 'dumped' their 62 percent shareholding onto their core investors, including you it seems. The decision by TOLL to 'dump' the stock and take a massive writedown on this years balance sheet, rather than persist with a difficult investment must send a very negative message to both core and non core investors concerning DJ.
This accumulating negative sentiment is doing the damage to DJ as any prospective investor will look closely at it, and possibly other similar models (such as Jet Blue in the U.S. (once a 'darling' now a 'dog') and decide accordingly.
Once a negative trend perception starts it is very difficult to stop. Economists call this the 'Pygmalian Affect' or the 'Self Fulfilling Prophecy' and to an extent this psychological phenomenon contributed to the run on banks in the U.S. which resulted in the 1929 stock market crash.
TOLL 'dumped' their 62 percent shareholding onto their core investors, including you it seems. The decision by TOLL to 'dump' the stock and take a massive writedown on this years balance sheet, rather than persist with a difficult investment must send a very negative message to both core and non core investors concerning DJ.
This accumulating negative sentiment is doing the damage to DJ as any prospective investor will look closely at it, and possibly other similar models (such as Jet Blue in the U.S. (once a 'darling' now a 'dog') and decide accordingly.
Once a negative trend perception starts it is very difficult to stop. Economists call this the 'Pygmalian Affect' or the 'Self Fulfilling Prophecy' and to an extent this psychological phenomenon contributed to the run on banks in the U.S. which resulted in the 1929 stock market crash.
Oracle - not sure about JetBlue being on the nose. Lufthansa seem to think they're got something going right there.
Give it time and I think that it will show that VB are on the right track with their model. Qantas don't really want to compete with them at the top end of the market, as they would rather up the yield in business class, which they dominate by default. That will open up a large enough market gap for VB to fill for those business pax who are a little more price sensitive. Of course they're going to have to really say goodbye to the leisure market, but that shouldn't be too much of a loss.
Give it time and I think that it will show that VB are on the right track with their model. Qantas don't really want to compete with them at the top end of the market, as they would rather up the yield in business class, which they dominate by default. That will open up a large enough market gap for VB to fill for those business pax who are a little more price sensitive. Of course they're going to have to really say goodbye to the leisure market, but that shouldn't be too much of a loss.
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xsite,
Only you can make the choice, do you want to change, do you want to be domestic FA (with or it's good and bad points) or do you really enjoy being a regional FA?
However Virgin Blue does have at least 2 years money in the bank. How much money does REX have? The fuel costs are hitting all airlines including REX. Virgin Blue is slowly picking up corporate clients (including a few in the ABX area), so this will impact on REX's yield.
Only you can make the choice, do you want to change, do you want to be domestic FA (with or it's good and bad points) or do you really enjoy being a regional FA?
However Virgin Blue does have at least 2 years money in the bank. How much money does REX have? The fuel costs are hitting all airlines including REX. Virgin Blue is slowly picking up corporate clients (including a few in the ABX area), so this will impact on REX's yield.
BPA just wondering where you got the 2 years cash from as a press release associated with the financials indicated a decline in reserve cash from 139 days operating reserve to 101?
Rex has extremely low to no debt compared and can restructure to operate very few routes, uncontested, very quickly. It will be interesting to compare their financial position as it will be released shortly.
Rex has extremely low to no debt compared and can restructure to operate very few routes, uncontested, very quickly. It will be interesting to compare their financial position as it will be released shortly.
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I think the the point to saying 2 years cash may be in the fact that the 101 days of operating cash is if all aircraft were grounded and there was absolutely no money coming into the company.
I think most will agree that this is a very unlikely scenario. In reality, if Virgin were to lose about 100 million per year and make that up with cash reserves then i would logically believe that they would have a few years of cash up their sleeve.
Regards,
Ratter
I think most will agree that this is a very unlikely scenario. In reality, if Virgin were to lose about 100 million per year and make that up with cash reserves then i would logically believe that they would have a few years of cash up their sleeve.
Regards,
Ratter
xsite,
I understand only a very small part of VB is listed on the ASX. The ex REX F/A's who I know that went to VB recently are very happy campers. Also recently a number of senior REX pilots had interviews and more will in the near future. A senior checkie from ML recently also resigned to start with VB. Go for it!
JT
I understand only a very small part of VB is listed on the ASX. The ex REX F/A's who I know that went to VB recently are very happy campers. Also recently a number of senior REX pilots had interviews and more will in the near future. A senior checkie from ML recently also resigned to start with VB. Go for it!
JT
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62% previously owned by TOL, 25% with Virgin Group (Branson), 3% with Brett, and the remaining 10% with the market.
Now with TOL dumping 60%, they will retain a small interest apparently, the market has 70% of the company to play with. The last two days of trading have seen volumes of 80 million as opposed to normal around 3 million per day. Thats roughly about 13 times the usual amount of trading in the company.
As I have said before this is probably super funds buying into a ASX 300 company to diversify their portfolios.
Now with TOL dumping 60%, they will retain a small interest apparently, the market has 70% of the company to play with. The last two days of trading have seen volumes of 80 million as opposed to normal around 3 million per day. Thats roughly about 13 times the usual amount of trading in the company.
As I have said before this is probably super funds buying into a ASX 300 company to diversify their portfolios.
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I think that release might just suggest who is doing the buying at the moment, it makes sense though that if you got controlling shares you could break up the company and sell its assets for a profit right now.
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VBA Trading- Mon 25 Aug 08
They put well over 40 million through yesterday, they seemed to firm a couple of cents in the last hour to close at 0.525 cents.
No announcements on change/or becoming a Significant Holder this morning- ex the ASX site.
Rgds
28- BE
No announcements on change/or becoming a Significant Holder this morning- ex the ASX site.
Rgds
28- BE
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I think that release might just suggest who is doing the buying at the moment, it makes sense though that if you got controlling shares you could break up the company and sell its assets for a profit right now.
Can I suggest you going back to school [business] and learn about economics including takeovers, then you will realease its not as simply as buying the company to shut it down.......
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It looks like VB shares have found their current niche in the market place at around the 50cent mark.
At that level the airline has been quote as worth about $600m (not including liabilities which have risen significantly over the last 12 months).
And as yet we havent seen the end of the fuel cycle or the US recession which will really bite Australia and hence all carriers (especially low cost of which VB is still one - sorry Brett!).
With such volatility any savvy gambler would even stay away from purchasing these shares as there are alot of other better value underpriced shares on the market that still pay good dividends!
At that level the airline has been quote as worth about $600m (not including liabilities which have risen significantly over the last 12 months).
And as yet we havent seen the end of the fuel cycle or the US recession which will really bite Australia and hence all carriers (especially low cost of which VB is still one - sorry Brett!).
With such volatility any savvy gambler would even stay away from purchasing these shares as there are alot of other better value underpriced shares on the market that still pay good dividends!