JetBlue airways IPO valuation
Case study—JetBlue airways IPO valuation
Introduction:
As a leader of airways industries, JetBlue is successful because of professional services and a good management team. In 2002, JetBlue became a public company. Despite the fact that US airline industry had witness 87 new airline failures over the previous 20 years, Jetblue overcame difficulties and expressed confidence in the bright future.
Before going public
Before going public in 2002, JetBlue has outstanding advantage in the whole industries. Because of the good performance by management team (CEO: David Neelman,President and COO: David Barger ,CFO: John Owen), JetBlue provided good services which include new aircraft, leather seat, free live TV at every seat and high quality customer services. As the same time, the JetBlue is also a Low-fare leader in southwest airlines. For these impacts, the company has played a significant role in the airline industries. As a result, in 2002 company decide to raise funding from public and issue 5,500,000 shares from public.
Being a public company:
The most important thing for JetBlue is that they need consider whether it is beneficial to be a public company. It is no denying that company will raise capital from public in the future and this could also increase liquidity and credibility for JetBlue. On the other hand, issuing stock as incentives can also be a good method to promote employee in an efficient and effective way. However, it also has some disadvantage such as reporting obligation and the expensive costs. Considering with the timing, the company decided to issue share after the 911 attack. In fact, after the 911 attack, the whole economy in American is not good, so at that moment, the airline industry enter a recover time to operate. So the timing is suitable for JetBlue to issue the IPO. Because the economy in American is in a growth recession, they believed that it was a good opportunity to introduce the company to public. Initial public
Introduction:
As a leader of airways industries, JetBlue is successful because of professional services and a good management team. In 2002, JetBlue became a public company. Despite the fact that US airline industry had witness 87 new airline failures over the previous 20 years, Jetblue overcame difficulties and expressed confidence in the bright future.
Before going public
Before going public in 2002, JetBlue has outstanding advantage in the whole industries. Because of the good performance by management team (CEO: David Neelman,President and COO: David Barger ,CFO: John Owen), JetBlue provided good services which include new aircraft, leather seat, free live TV at every seat and high quality customer services. As the same time, the JetBlue is also a Low-fare leader in southwest airlines. For these impacts, the company has played a significant role in the airline industries. As a result, in 2002 company decide to raise funding from public and issue 5,500,000 shares from public.
Being a public company:
The most important thing for JetBlue is that they need consider whether it is beneficial to be a public company. It is no denying that company will raise capital from public in the future and this could also increase liquidity and credibility for JetBlue. On the other hand, issuing stock as incentives can also be a good method to promote employee in an efficient and effective way. However, it also has some disadvantage such as reporting obligation and the expensive costs. Considering with the timing, the company decided to issue share after the 911 attack. In fact, after the 911 attack, the whole economy in American is not good, so at that moment, the airline industry enter a recover time to operate. So the timing is suitable for JetBlue to issue the IPO. Because the economy in American is in a growth recession, they believed that it was a good opportunity to introduce the company to public. Initial public