Profit-taking during the next few days is innevitable, with the congruent drop in share price. Many investors need to make money whereever they can in today's bearish market. I'm still optimistic that the stock will rebound with the announcement of the 2nd quarter performance numbers.
Bottom line: I'm in the stock for the long run. As an employee, I prefer to focus on delivering a great product. JetBlue's philosophy of Take care of the employees and they'll take care of the customer still holds true--and that's how to increase shareholder value.
I agree with your approach (long-run vs. short-term gain). I'm not so sure that all of your co-workers agree with you. Some of them saw paper fortunes accumulating over the summer, just to evaporate over the past few weeks leading into the lockup expiration.
I'm sure it doesn't help those who had already mentally spent the proceeds from selling at the $50 range. 100 shares today is worth about $1200 less than they were in late July/early August when it was in the $44 range.
Looking ahead to 3Q earnings, I wouldn't hold my breath on a huge uptick. The September traffic announcement didn't do much for the stock, and if anything, may have contributed to some of the falloff this week as much as the lock-up expiration did. The 15% LF drop month over month doesn't bode well for 4Q, and even the non-airline saavy people will notice if the profit margin shrinks significantly between 2Q and 3Q.
I'm still expecting this to hang out in the $30-$35 range for a while.
Yes, as far as my options are concerned, I can only sell 10% per year if I so choose. If I were worried about short term gains, however, I wouldn't be taking advantage of the employee stock option plan as well.
More importantly, my hopes are that the stock will provide an adequate retirement income for me when the time comes. With no A or B fund, company performance equates to my future wealth or lack thereof. Thus (in purely selfish terms) for my own benefit I'm working for the long haul, trying to build an airline that I'll be proud of and the customer will return to. In short, if the company is profitable, I will be rewarded. There's nothing wrong with a concept that ties personal performance with personal gain--in fact, I belive it to be the cornerstone of our economy. Once we lose sight of that argument, we begin to loose efficiency.
As far as the Sept load factors, I'm frankly happy with the LFs presented given the traditional downturn of business during this period and the anniversary of the bastard's attacking us. The quarterly numbers will be ok--July and August's load factors were great.
On 10/12/2002 2:25:22 PM eagleflip wrote:
More importantly, my hopes are that the stock will provide an adequate retirement income for me when the time comes. With no A or B fund, company performance equates to my future wealth or lack thereof. Thus (in purely selfish terms) for my own benefit I'm working for the long haul, trying to build an airline that I'll be proud of and the customer will return to. In short, if the company is profitable, I will be rewarded. There's nothing wrong with a concept that ties personal performance with personal gain--in fact, I belive it to be the cornerstone of our economy..
The only problem with you view, is you're tying EVERYTHING to the performance of ONE stock in possibly the WORST market sector in existance. You can be the absolute best employee and worker in the world, and due to economic circustances beyond your control, lose the whole bundle (accident, predatory pricing, mechanics strike, ect). It's understandable that since you company is young, you can't expect a mature contract, but I'm sure just about investment advisor will tell you that you'll be better served in the future with a B-fund or good 401K matching that is invested as far away from the airline industry as possible
my hopes are that the stock will provide an adequate retirement income for me when the time comes.
I've got to agree with busdrvr here. For better or for worse, you shouldn't look at the stock options or stock purchases as a suitable retirement plan. At this point, they are a reward for signing on with a new airline, with the difference in strike price (earlier is lower) reflecting the risk (earlier is higher). You have to be willing to lose it all and still provide for retirement. They could make every one of us on the property very wealthy in the long run, but by putting all of your eggs in one basket... well, you know the rest. Retirement is what the 401(k), IRA's, and even profit sharing is for.
No doubt you're squared away financially, but I just wanted to warn against the mindset of expecting the stock to keep you in boats and fancy cars in your old age. It's better to be pleasantly surprised than stress out every time the stock drops a point or two.
Your points are valid. My retirement plan does not consist entirely of JetBlue stock--if it were, I'd gain more gray hairs during the next few years. I didn't mean to imply that the eggs in one basket theory is at work here.
Nevertheless, I still believe that employee compensation should be directly tied to productivity.
And JeffG, I plan on buying both a boat AND a plane when I get rich.