Biggest U.S. airlines spent bulk of free cash flow on stock repurchases
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Re: Biggest U.S. airlines spent bulk of free cash flow on stock repurchases
#2The us economy is a house of cards
Re: Biggest U.S. airlines spent bulk of free cash flow on stock repurchases
#3So it would be logical if shareholders re-capitalize airlines now. Or let them fall if shareholders see no point in keeping airlines alive.
Re: Biggest U.S. airlines spent bulk of free cash flow on stock repurchases
#4So then they won’t mind trading stock to the government for cash, right? Hah... never met a corporate executive who didn’t magically become a socialist when the chips were down.
Re: Biggest U.S. airlines spent bulk of free cash flow on stock repurchases
#5Wiki says:
> free cash flow to firm (FCFF) is a way of looking at a business's cash flow to see what is available for distribution among all the securities holders of a corporate entity. [0]
What do people expect them to do with free cash flow? The point of free cash flow is to get the money back to shareholders. These aren't high-growth industries.
Re: Biggest U.S. airlines spent bulk of free cash flow on stock repurchases
#6Wiki says: > free cash flow to firm (FCFF) is a way of looking at a business's cash flow to see what is available for distribution among all the securities holders of a corporate entity. [0] What do people expect them to do with free cash flow? The point of free cash flow is to get the money back to shareholders. These aren't high-growth industries. [0] https://en.wikipedia.org/wiki/Free_cash_flow
Pay employees more, increase benefits, better service for customers, put money away for a rainy day? There are lots of ways to spend money that are good for the long term rather than making the rich richer.
Re: Biggest U.S. airlines spent bulk of free cash flow on stock repurchases
#7Of course they prioritized sending money to investors, the incentives align to promote that outcome. They know they're a thin margin industry and that if anything serious happens they go tits up. Looking stupid for not saving money in the bankruptcy hearing is free. Having assets that you saved for tough times spent in order to delay the bankruptcy cost you those assets.
Re: Biggest U.S. airlines spent bulk of free cash flow on stock repurchases
#8So it would be logical if shareholders re-capitalize airlines now. Or let them fall if shareholders see no point in keeping airlines alive.
That would involve selling shares at a low price after buying them at a high price. This would make management look stupid.
Re: Biggest U.S. airlines spent bulk of free cash flow on stock repurchases
#9So it would be logical if shareholders re-capitalize airlines now. Or let them fall if shareholders see no point in keeping airlines alive.
Why would the shareholders do that if they think the government may step in and bail them out?
Re: Biggest U.S. airlines spent bulk of free cash flow on stock repurchases
#10Wiki says: > free cash flow to firm (FCFF) is a way of looking at a business's cash flow to see what is available for distribution among all the securities holders of a corporate entity. [0] What do people expect them to do with free cash flow? The point of free cash flow is to get the money back to shareholders. These aren't high-growth industries. [0] https://en.wikipedia.org/wiki/Free_cash_flow
They could hold on to some, just in case there was a disturbance that caused cashflow to stop for a while.