Case 1- JetBlue Airways IPO Valuation - Jing Zhang ( 23913134 ) A company issue stocks to generial public at its first time on a security exchange is call Initial Public Offering( IPO ). Initial Public Offering enable a company to raise capital from the public rather than private investors or institutions. IPO is considered as such a big deal for a company mainly because the company become a public corporation and have to be monitored by general pubic after
Words: 922 - Pages: 4
Memorandum TO: FROM: DATE: September, 27 2013 RE: One-Page Memo on JetBlue Case Study The purpose of this memorandum is to discuss the JetBlue case study, and review my answers to the specified questions. I will elaborate as to which price I believe JetBlue should choose for their initial public offering (IPO), and why JetBlue should choose that price. The first step in determining JetBlue’s IPO price is analyzing specific ratios of publicly traded competitors in JetBlue’s
Words: 926 - Pages: 4
Mavis Lei JetBlue Airways IPO Valuation Introduction and Recommendation In July 1999, David Neeleman had announced his plan to launch a new airline company that would bring “ humanity back to air travel” despite the fact that U.S. airline industry had lot failures over the past 20 years. JetBlue had target its strategy and operating philosophy by offering customers low –fares tickets, high performance of customer service, providing new aircrafts and focused on point-to-point service to large
Words: 1874 - Pages: 8
JETBLUE AIRWAYS IPO VALUATION Teaching Note This case examines the April 2002, decision of JetBlue management to price the initial public offering of JetBlue stock during one of the worst periods in airline history. The case outlines JetBlue’s innovative strategy and the associated strong financial performance over its initial two years. Students are invited to value the stock and take a position on whether the current $25–$26 per share filing range is appropriate. The case is designed
Words: 3808 - Pages: 16
Yale School of Management 135 Prospect Street, New Haven, CT 06511 JetBlue Airways October 9, 2002 Time Frame 12 Months Recommendation SELL Recommendations: Buy: >20% Undervalued Hold: Fair Market Value Sell: >20% Overvalued “If you want to become a millionaire, start with a billion dollars and launch a new airline…” - Richard Branson, founder of Virgin Atlantic Airways Team Members: Brad Anen brad.anen@yale.edu (203) 865-6166 % Returns Over the Last 12 Months (Prices
Words: 7268 - Pages: 30
The case “JetBlue Airways IPO Valuation” outlines JetBlue’s innovative strategy and the associated strong financial performance over the initial two years, in order to determine the price of initial public offering of its stock on April 2002. To the whole industry of Airlines, the terrorist attacks of September 2001 caused a challenge, especially to large numbers of low-fare U.S. airlines. However, JetBlue remained profitable and grew aggressively. From 2002, the low-fare business model
Words: 1735 - Pages: 7
industry analysis JetBlue Airway Corporation is an American low-cost airline and it was one of a few U.S. airlines that were profitable during the sharp downturn in airline industry affected by the September 11, 2011 attacks. With its strong capital base, the company was successful due to its impressive management team, in which, David Neelaman has rich experience with airline start-ups; COO David Barger and CFO John Ower are all experienced former senior managers from other airlines. The company’s
Words: 1787 - Pages: 8
Flow techniques and relative valuation techniques that we can use to value Jetblue’s share, however we are going to use the Free Cash Flow technique for this case as this is an IPO and the company had no history whatsoever that we can rely on except by using its similar competitor statistics and assumptions to value Jetblue. In conclusion, we have calculated that using Free Cash Flow technique, the share price is $57 and therefore the current range of $25 to $27 is underpriced and that they should
Words: 1162 - Pages: 5
HEAVY EDIT JetBlue Airlines: Getting “Blue” again?* JetBlue posted a net income $97 million in 2010. The airline continues to pursue its goal of becoming ―the Americas‘ Favorite Airline‖ and aims attainting positive free cash flow and long term sustainable growth while maintaining adequate liquidity position. Financially, the airline was far better than after the Valentine day fiasco in February 2007 and subsequent loss of $84 million in 2008. It focuses on controlling costs, maximizing unit revenues
Words: 5935 - Pages: 24
Please find JetBlue airways case and their IPO prices Calculation table. The purpose of this memorandum is to discuss the initial public offering and the pricing of IPO of JetBlue Airways by using the selected multiples of comparable airlines. It also includes some advantages and disadvantages of a firm from going public. The multiples used to set IPO price were prices per share, earning per share, cash flow per share, total assets per share, and revenue per share of five comparable airlines. When looking
Words: 1291 - Pages: 6
