Virgin America Inc., the seven-year-old airline partially owned by U.K. billionaire Richard Branson, is valuing itself at as much as $1 billion in a U.S. initial public offering.
The company and its employees could raise as much as $320 million by offering investors 13.3 million shares for $21 to $24 apiece, according to a filing with the U.S. Securities and Exchange Commission.
Branson’s Virgin Group owns a 22 percent stake in Virgin America through VX Holdings LP.
Virgin America started service in August 2007 and has a fleet of Airbus SAS A320 single-aisle jets and flies to destinations including San Francisco, Los Angeles, Las Vegas, New York’s John F. Kennedy airport and Boston.
Virgin America and New York-based shareholder Cyrus Capital Partners LP have agreed to sell about millions of shares in a private placement alongside the IPO. The company will use its proceeds for capital expenditures, marketing, flight equipment and aircraft-operating leases.
Could a Virgin America’s IPO be coming public at just the right economic time?
As crude oil slumped this year, jet fuel prices have followed. At the same time, one-way domestic coach flights averaged $466 this year through September, a gain of 1.7 percent from last year.
Virgin America posted net income of $56.2 million during the nine months through September, compared with a loss of $4 million in the same period last year.
The airline recently became the last major U.S. carrier to unionize, which could potentially raise costs at the company known for having expenses below those of rivals.
While we are not recommending the IPO (yet), are people really ready to travel?
Economists are suggesting that with GDP in the 3rd quarter, humming in at 3.5%, the economy and consumer spending will start to rebound.
So, holidays abound! The traditional Bad october month is gone. Unemployment is going down? Interest rates & gas prices are also down. Time to spend money by going away to visit family and buy lots of toys????
Did I say lots of toys???
Did I say lots of toys?
So do I look at “Toys” or “Airlines” to invest in within the next 3 months?
Don’t forget your short (less than 1 year) and long term (more than 1 year) goals! And remember, get sound advice from a credentialed financial advisor first? And if you do, wear your coat, its cold outside!
Did I say “Coats”? Like Mink Coats? Fur Coats? Children Coats?
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