Jetblue Shares Take A Hit

[MiAAmi]

JetBlue Airways Corp. (JBLU.O: Quote, Profile, Research) fell 4.5 percent after the low-cost airline said it plans to sell about $250 million in convertible debt.

Shares of JetBlue sunk to $17.80 on Inet, down from its close of $18.63 on Nasdaq.

 

[javaboy]

Actually it is quite amazing that JBLU can offer and find buyers for its offering. Access to capital markets is key to any business model, whats more amazing is that it is for an airline in the post 9/11 era. see below what might happen if you can not access capital markets. thus should be taken as a sign of strength in the company and its business model.

h34r:




Delta Air Lines Inc. Thursday said it expects to record a "substantial" net loss for 2005.

The airline also believes that cash flow from operations won't be sufficient to meet all of its liquidity needs for the year, according to its annual report filed with the Securities and Exchange Commission.

In addition, the company said that because substantially all of its assets are encumbered and its credit ratings have been substantially lowered, it doesn't expect to be able to obtain any material amount of additional debt financing.

Unless it is able to sell assets or access the capital markets by issuing equity or convertible debt securities, Delta said it expects that its cash and short-term investments will be substantially lower at Dec. 31 than the $1.8 billion of such assets at the end of 2004.

h34r:

 

[bluetoad]

Jetblue is borrowing the money to buy some of Delta's assets. ie gates