Minyanville Professor Minyan Peter dares to share the kind of keen insight and actionable information you won't find in any prospectus. For more original thought, visit www.minyanville.com.
As many people have heard before, there are only two times a company issues common stock: When it absolutely has to or when it is stupid not to.
Well yesterday's issuance by US Airways (NYSE: LCC) may represent that once in a lifetime opportunity to see those seemingly contradictory principles in action at the same time. Having seen its stock trade at $1.45 not a month ago, $8.50 must seem pretty sweet to US Airways management, particularly with strong technical resistance at $10.00 providing a pretty strong ceiling above.
With airline stocks trading as the most leveraged play on the price declines in oil, I can understand why US Airways management took advantage of the window being open to issue stock. But just because the issuance window is open, doesn't mean investors should jump.
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Reader Comments (Page 1 of 1)
9-01-2008 @ 7:54PM
jack said...
hi.i,m confused,doesn,t today,s oil prices reflect purchases for a furture date? if so why would these changes effect today,s airline stock prices..would someone please explain..thanks..