1 / 19

Airways IPO Valuation

Airways IPO Valuation. 黃致嘉、呂建輝、顏睿甫、陳柏誠、戴肇逸、端木偉葶. Background. July 1999, Jetblue Airline that would bring "humanity back to air travel"-David Neeleman (founder) New manager team David Barger, President and COO John Owen, CFO Strategy Raised $130 million in funding

umed
Télécharger la présentation

Airways IPO Valuation

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Airways IPO Valuation 黃致嘉、呂建輝、顏睿甫、陳柏誠、戴肇逸、端木偉葶

  2. Background • July 1999, Jetblue Airline that would bring "humanity back to air travel"-David Neeleman (founder) • New manager team David Barger, President and COO John Owen, CFO • Strategy • Raised $130 million in funding • Lowest cost per available-seat-mile • point-to-point service to large metropolitan • estabilishedto be known as a safe, reliable, low-fare airline

  3. Why IPO?

  4. Why IPO ? • Access to capital going public is to raise primary capital to fund growth, repay debt or fund an acquisition • Increased Liquidity whenthe company is public, the existing owners have a public marketplace through which they can liquidate their holdings • Branding event by listing on the NYSE, the company will receive worldwide media coverage through the financial markets, which provide constant live coverage on publicly traded companies. • Enhanced benefits for current employees Stock-based compensation incentives align employees’ interests with those of the company.

  5. IPOPros and Cons Advantages • Raising additional capital through IPO • Support growth • Offset venture capitalist's portfolio losses • Greater public awareness • Increase liquidity • Available information

  6. IPOPros and Cons Disadvantages • Increased costs • Dilution of ownership • Exposure to idiosyncratic risks • Public pressure by stockholders • Overpriced IPO can cause company challenges • Industry in decline

  7. IPO Valuation

  8. IPO Valuation • Initial price range • Initial price range: $22 to $24 • Facing excess demand:$25 to $26 • Problems • Current price would leave money on the table • Raising the price could compromise the deals success

  9. IPO Valuation • At what price should JetBlue offer their shares? • DCF Analysis • Comparable Analysis

  10. DCF Analysis

  11. DCF Analysis • PV=∑ • FCF(free cash flow)=EBIT (1 – Tax) + Depreciation – Change in Working Capital(networking capital的change) – Capital Expenditure • Discount rate:WACC • Growth Rate =NOPAT

  12. WACC Southwest’s WACC • Cost of Equity • Cost of Debt WACC=8.994%

  13. Free Cash Flow

  14. DCF Pricing • Historically Expected Inflation Rate =2%~4% • Growth Rate = 3 % 35.1+5.5=40.6 M shares The price is 27.81

  15. Comparable

  16. Comparable • EPS*=P Other firms in the same industry

  17. Comparable valuation: Price/Earning Ratio Price/Earning Ratio

  18. Comparable valuation: Price/Book Value Ratios Price/Book Value Ratios *Average Comparable Price = 27.69

  19. Underpricing of IPOs • Average Comparable Price = 27.69 • DCF= 27.81 Ifwechoose27.69,we’llleavetoomuchmoneyonthetable. But after 911 accident, if we choose 27.81, the price will be overpriced and too greedy. So the final price will be (27.69+27.81)/2=27.75

More Related