Supposedly Also, does anyone know if these things are usually fruitful for new investors? The ‘poison pill’ went into effect July 3. It allows existing shareholders to buy more sharesat a lower price, to combat hostile takeover
I do not previously have shares, so I don’t know if it’s too late to invest as a new investor and still be able to take advantage of this poison pill .
Also, does anyone know if these things are usually fruitful for new investors?
Is it worth investing in the ‘poison pilled’ Southwest Airlines?
byu/futurespacecadet inwallstreetbets
Posted by futurespacecadet
11 Comments
When CVNA took their “poison pill” I bought it at $4 and sold at $20 making quite a bit of profit. Now it’s at $136 and I’m kicking myself to death 💀
This sometimes comes out long-run bullish but obviously there’s downward pressure in the short term. Seems fairly clear that if you believe the current (or higher) valuation is correct, you would want to buy in either now (to get the full 50% discount if the pill triggers) or after downward pressure reduces price when the pill triggers.
That said, I don’t have enough information about LUV to give more practical advice about their particular situation, you’ll need to develop your own thesis about that.
If I were to invest in the airline industry I would probably only be able to justify Delta. Big IF in the first place though for most investors
Can retail investors buy at the 50% discount?
Worth buying a share in case then? Lol. Is there a cap on how many shares they will issue?
No, Archer Aviation.
U are better off buying bitcoin than southwest airline.
I’m no airline investor so I can’t say much, but the broader view on poison pill is generally positive.
LUV is a major budget carrier airline, it’s not going to go anywhere. Travelling has only increased every month since the world reopened post Pandemic. You hear people complaining about “NOT FLYING X ANYMORE” or “AVOID FLYING WITH Y”, but you never hear anyone complain saying they will never travel again. Plus with the past history of how airlines put themselves up for acquisition, it’s low risk medium reward for an airline like LUV. Even in the worse case scenario where LUV faces liquidation, lots of major carriers would swoop in to acquire them just to take over the lucrative routes LUV offer.
For me personally, I would buy more if I’m looking for any timeline that’s beyond a year or looking to sell CCs
Airlines are a value trap and a horrible business. I would stay far away. Even Warren Buffett got burned.
Most airlines lose money on operations but make money with the rewards credit cards banks offer. Credit card defaults are rising because people aren’t paying their bills. Once the banks experience significant losses they’ll stop issuing credit cards and the airlines will be in trouble.
US Airways filed for bankruptcy 3 times.
https://en.wikipedia.org/wiki/List_of_airline_bankruptcies_in_the_United_States
The only worthwhile investment in airlines is to short them. They’re are fucking nightmares to own.
I wouldn’t.