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Aircastle LTD Message Board

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  • warlord_shea warlord_shea Oct 3, 2008 4:32 PM Flag


    I don't think you're missing anything.

    To address a common thread on the board - i.e. "the banks own the planes". Well it's not quite that simple and I'm sure most everyone understands that.

    The bank owns "some or part" of some of AYRs planes and AYR owns some planes entirely, and owns the remainder of the balance of the planes. Of the planes owned by AYR and the banks, the banks will get priority in a default situation.

    So rather than look at "we own ffo and banks own the planes" I prefer to focus on owner's equity. Since I got burned by incorrect numbers on Google's site I'll post the Yahoo finance link here... it seems mostly correct at a glance:

    This balance sheet shows a lot of debt. It also shows a lot of assets which exceed those debts. Our equity is currently 1.316 billion. This means if everything were sold and all debts paid we'd be left with 1.316b. Now that's not usually how such a disaster plays out (it's a bit optimistic as the sales often have a short fuse) that puts us at a book value of 78m shares/$1.316b or roughly $16.87 per share.

    I know this is remedial for people (computing book value) but it underscores that we're not in danger of going out of business any time soon.

    A few thoughts:

    1) Markets hate elections. Elections represent change (all of them, not just this one) and change translates to volatility in some people's minds.
    2) Markets really hate sweeping changes like the one passed today. Debate on either side, the bill passed and signed into law today is huge and represents a massive change.
    3) Emotional traders will sell at the wrong time and buy at the wrong time. Warren Buffet is buying right now. Everyone else seems to be selling.

    Buck up, quarterly announcement is four weeks away. My advice is live your lives, vote as you see fit, and come back after the election at the SOONEST. Buffet (though we don't see eye-to-eye politically) does have investing down and says you should plan on buying and holding good companies for no less than five years. I believe that to be mostly true, but plan on more of a 1-2 year ride myself.

    Financially everything for AYR is sewn up. All debts have stated terms, the revolving account due in December has a balance of ZERO and no material announcements have been made due to this mess. The financing thing that just happened was in the cards since at least as far back as January.

    I'm not promising it goes up. I'm just promising it will eventually :)

    Relax and have a good weekend, all!


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