Merged: Virgin Blue Share Price - how low can it go and for how long?
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Merged: Virgin Blue Share Price - how low can it go and for how long?
VB shares must be taking a beating...they even got a mention on CNN in the States!!!
Nunc est bibendum
$0.89...down two cents (or nearly 2.2 percent) for the day. Down about 40 cents in the last three or four weeks? Personally I reckon that's underdone but I don't have enough spare cash to put my money where my mouth is! 
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Can someone tell me how it is even possible that the limited amount of shares on the market can make much of a difference to VB.
Toll own 62%
Virgin Group own 20%
Brett has say 5%
Leaving only 13% actually traded on the market. This would have to be one of the lowest actual amount of shares on any of the companies on the stock exchange. Even if Toll are selling off whilst talking about holding VB shares they would surely reach a point where they would have to tell the market that they are doing this.
Perhaps someone with more knowledge about the stock exchange than myself can explain?
Toll own 62%
Virgin Group own 20%
Brett has say 5%
Leaving only 13% actually traded on the market. This would have to be one of the lowest actual amount of shares on any of the companies on the stock exchange. Even if Toll are selling off whilst talking about holding VB shares they would surely reach a point where they would have to tell the market that they are doing this.
Perhaps someone with more knowledge about the stock exchange than myself can explain?
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Time to watch the wave people, peaks and troughs here they come.
Listings as of some time ago..
Toll 62%
Virgin Group 25%
BG 3%(ish)
Market 10%
At listing in 2003 VBA was worth an estimated $2.3 Billion, today it is likely about 1.1 (or less).
Tricky Dicky sold down to Patrick for a fortune, not bad for $10 million in seed money.
Now BG who has 3%(ish) has gone from a reported $85M down to $30M(ish) so whatever happens I will not be shedding a tear because it was only ever worth the paper the documents were signed on. Don’t forget that.
BG will stay, Toll will hold on, end of the day they are very well run and are proactive if anything, see the “cutting flights” thread.
As to Tricky the windbag coming back in, doubtful. Little has piddled on his shoes before and there is no love lost between the two and although VBA is “non-core”, belly cargo in V-Aus is definitely core. Meaning Tricky cant get his hands on more than 49% of an Australian Company operating internationally (Stands to be corrected on this bit), which would then kill V Aus, similar vein to why SQ cant/wont pitch the pacific.
Watch this space, money and debt are harder to come by right now at the right price so whomever is contemplating needs cash/equity and deep pockets.
The key will be the mums and dads who bought into windbags’ hype and paid double for what their shares are worth now. So whoever panics and and dumps there will be some interesting buyers (sharks) that will bounce in the future.
From scuttle but around our office some one was crunching the numbers to see if they could raise the $1bn plus just to get their hands on the outstanding VB 737 purchase rights that they have at a very very good price and turnover the airframes for the cash.
Watch this space there is word out
Listings as of some time ago..
Toll 62%
Virgin Group 25%
BG 3%(ish)
Market 10%
At listing in 2003 VBA was worth an estimated $2.3 Billion, today it is likely about 1.1 (or less).
Tricky Dicky sold down to Patrick for a fortune, not bad for $10 million in seed money.
Now BG who has 3%(ish) has gone from a reported $85M down to $30M(ish) so whatever happens I will not be shedding a tear because it was only ever worth the paper the documents were signed on. Don’t forget that.
BG will stay, Toll will hold on, end of the day they are very well run and are proactive if anything, see the “cutting flights” thread.
As to Tricky the windbag coming back in, doubtful. Little has piddled on his shoes before and there is no love lost between the two and although VBA is “non-core”, belly cargo in V-Aus is definitely core. Meaning Tricky cant get his hands on more than 49% of an Australian Company operating internationally (Stands to be corrected on this bit), which would then kill V Aus, similar vein to why SQ cant/wont pitch the pacific.
Watch this space, money and debt are harder to come by right now at the right price so whomever is contemplating needs cash/equity and deep pockets.
The key will be the mums and dads who bought into windbags’ hype and paid double for what their shares are worth now. So whoever panics and and dumps there will be some interesting buyers (sharks) that will bounce in the future.
From scuttle but around our office some one was crunching the numbers to see if they could raise the $1bn plus just to get their hands on the outstanding VB 737 purchase rights that they have at a very very good price and turnover the airframes for the cash.
Watch this space there is word out
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Hog,
I don't think there are many airframes that VB actually own. Its only about 10 aircraft. The rest are leased and the firm orders are for EMB's and some 777, they are not even here yet. If they are buyin the stock for firm order options, well thats different. VB owns nothing, no terminals, no assests, just the rights to Bransons name. About the purchase rights to the 737's, I don't know how many they have on order. Interesting times ahead myfriend.
Either way, I think this company is a slow sinking ship! I give it 12-18 months and it won't exsist in its current form. Two airline Aus, here we go again.
I don't think there are many airframes that VB actually own. Its only about 10 aircraft. The rest are leased and the firm orders are for EMB's and some 777, they are not even here yet. If they are buyin the stock for firm order options, well thats different. VB owns nothing, no terminals, no assests, just the rights to Bransons name. About the purchase rights to the 737's, I don't know how many they have on order. Interesting times ahead myfriend.
Either way, I think this company is a slow sinking ship! I give it 12-18 months and it won't exsist in its current form. Two airline Aus, here we go again.
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So we are talking about a company that makes $100 million every year with debt only associated with assets shutting down in 12 months. Sure that makes sense. 
Ansett only made one profit in two years of the last ten ( and those were only after Big Ed did some asset sales) and had 2 Billion in debt when it tanked. Can't see the comparison although if pax numbers dive it could be a different story.
Ansett only made one profit in two years of the last ten ( and those were only after Big Ed did some asset sales) and had 2 Billion in debt when it tanked. Can't see the comparison although if pax numbers dive it could be a different story.
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Hi Deeds,
The company made $215 million last year and is expected to make $100 million this year which includes the capital outlay for a major expansion.
If i were in a company making $100 million i am not so sure that i would be calling it a sinking ship? The share price has tanked because the market, which is already a very nervous one, does not like to hear profit downgrades. Nevertheless, i would think that comments like yours would be more appropriately reserved for when there is $0 profit or an overall loss.
Regards
Ratter
Either way, I think this company is a slow sinking ship! I give it 12-18 months and it won't exsist in its current form. Two airline Aus, here we go again.
If i were in a company making $100 million i am not so sure that i would be calling it a sinking ship? The share price has tanked because the market, which is already a very nervous one, does not like to hear profit downgrades. Nevertheless, i would think that comments like yours would be more appropriately reserved for when there is $0 profit or an overall loss.
Regards
Ratter
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If i were in a company making $100 million i am not so sure that i would be calling it a sinking ship?
The Australian economy has only just started to slow down, and there's already a sharp profit dive. How could the share price not have slumped?
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So we are talking about a company that makes $100 million every year with debt only associated with assets shutting down in 12 months. Sure that makes sense. Ansett only made one profit in two years of the last ten ( and those were only after Big Ed did some asset sales) and had 2 Billion in debt when it tanked. Can't see the comparison although if pax numbers dive it could be a different story.
Morning all
Coaldemon and Ratter
Would have to agree. I would'nt mind owning a couple of companies each making a profit of 100M plus each year.
If DJ or any company for that matter makes 100M plus profit each year then their not going the gurgler any time soon.
Also i reckon i can think of several American legacy carries who would be happy to be in that position.
Skystar320.
I was witn AN mks 1 and 2 to the end and i don't think coaldemon is too far from the mark.
I don't think any shareholder and/or employee likes to see their company downgrading profits, but these are trying times for a lot of companies and not just in aviation. 100M plus in the bank after all the bills have been paid is not a bad result.
And let's not forget that a number of factors affecting DJ are affecting other airlines.
Fly safe and play hard.
Regards to all.
Hoss 58
Coaldemon and Ratter
Would have to agree. I would'nt mind owning a couple of companies each making a profit of 100M plus each year.
If DJ or any company for that matter makes 100M plus profit each year then their not going the gurgler any time soon.
Also i reckon i can think of several American legacy carries who would be happy to be in that position.
Skystar320.
I was witn AN mks 1 and 2 to the end and i don't think coaldemon is too far from the mark.
I don't think any shareholder and/or employee likes to see their company downgrading profits, but these are trying times for a lot of companies and not just in aviation. 100M plus in the bank after all the bills have been paid is not a bad result.
And let's not forget that a number of factors affecting DJ are affecting other airlines.
Fly safe and play hard.
Regards to all.
Hoss 58
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One of the truisms of the sharemarket is " The market is always right." It's a warning about buying against the trend.
The price is going down for a reason. Anyone thinking of buying VBA shares when the trend is down needs their head read because there are very good reasons for it. These reasons may only be short term, such is the nature of the sharemarket, but they are compelling for the analysts and institutions nevertheless.
The price is going down for a reason. Anyone thinking of buying VBA shares when the trend is down needs their head read because there are very good reasons for it. These reasons may only be short term, such is the nature of the sharemarket, but they are compelling for the analysts and institutions nevertheless.
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And one of the falsehoods of the sharemarket is "The market is always right".
A lot of astute investors make a lot of money taking advantage of "opportunities" that arise when the believe the market has undervalued or overvalued a stock. The market always overreacts. The market sometimes panics. The market often gets greedy. The market is, actually, a bunch of fools...
A lot of astute investors make a lot of money taking advantage of "opportunities" that arise when the believe the market has undervalued or overvalued a stock. The market always overreacts. The market sometimes panics. The market often gets greedy. The market is, actually, a bunch of fools...
And let's not forget that a number of factors affecting DJ are affecting other airlines
Compare these to today's prices - QAN $3.56 - down about 40% since October, REX now $1.16 down 57% and VBA 90c down 61%.
So whilst VBA might have their problems at the moment they are not alone.
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$100m Cost Cutting
Brett sent an email out to all staff saying that the company needs to cut $100m in costs and information to staff on the first cuts will be within weeks... any ideas on what they might cut ?
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Tell you what HF3000, you buy some 1000 shares now and I will short 1000, and lets compare notes in a month or so.
Last edited by Capt Kremin; 16th Apr 2008 at 06:22.
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I would take you up on that with the exception that I wouldn't expect to see a profit in a "month or so". But I reckon you'd see a significant opportunity to sell those shares for a good profit some time in the next few years. Aviation is cyclic - the risk is when an airline doesn't survive a downturn. I think DJ will survive this downturn, and so will Qantas. I would buy shares in both airlines at the current prices. DJ may be a bigger risk, but also might turn out to be a bigger reward.
I wouldn't be taking out a margin loan on those shares though, so I suppose that means I confess there's a good chance of more loss before there is gain.
I also wouldn't commit more than a small percentage of my portfolio to airline stocks!
I wouldn't be taking out a margin loan on those shares though, so I suppose that means I confess there's a good chance of more loss before there is gain.
I also wouldn't commit more than a small percentage of my portfolio to airline stocks!
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VBA- 16 April 08
They bounced along at .89/.90c for most of the day and softened to .88c at the end, on a volume of 1,131,865.
Link to the chart for today ex the ASX website- below:
ASX Chart- VBA 16/04/08
Link to the chart for today ex the ASX website- below:
ASX Chart- VBA 16/04/08
Last edited by Section28- BE; 16th Apr 2008 at 06:55. Reason: Grammar
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The recent collapses and mergers in the airline industry imply survival is becoming increasingly difficult. Sadly history tells us only the strongest will stay.
With a population of only 22 million I can't see all OZ airlines cruise through the upcoming economic downturn, exacerbated by the subprime crisis. Banks are not as willing to lend money to keep you above water, and personally I think only QF/JQ will be around in a few years' time.
With a population of only 22 million I can't see all OZ airlines cruise through the upcoming economic downturn, exacerbated by the subprime crisis. Banks are not as willing to lend money to keep you above water, and personally I think only QF/JQ will be around in a few years' time.