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Strategies & Market Trends : Take the Money and Run -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (11048)	7/26/2002 2:40:46 PM
From: 2MAR$	Read Replies (1) \| Respond to of 17639

still ferocious selling in CSCO ....

To: Jorj X Mckie who wrote (11048)	7/31/2002 5:59:50 AM
From: Bocor	Read Replies (2) \| Respond to of 17639

Tuesday July 30, 3:38 pm Eastern Time Reuters Company News JetBlue backers look to sell stock without rocking market By Jake Keaveny NEW YORK, July 30 (Reuters) - Upstart airline JetBlue Airways Corp (NasdaqNM:JBLU - News) is reviewing how to sell more stock without toppling its high-flying market price so that early investors can cash out on some of their investments. ADVERTISEMENT Original venture capital backers like J.P. Morgan Chase & Co (NYSE:JPM - News), financier George Soros and former New York Knicks president David Checketts will be able to sell shares on October 9 -- when the so called "lock-up" period ends following JetBlue's initial public offering last April. The two-year old airline's market value has surged to $1.9 billion, an 800 percent return for early stage investors. The problem is that the 33 million shares becoming free for sale are almost five times what's currently publicly traded, enough to flood the market and drive down the stock price. "Some shareholders will want the opportunity to realize some of their investments," said JetBlue chief executive David Neeleman in an interview. "We're looking into ways to do that in an orderly way." Given the potential impact on the market, JetBlue backers have plenty of incentive not to dump all of their shares at once. Furthermore, the company is still growing fast, and seen by many as an attractive long-term investment. But after suffering heavy losses from the dozens of technology start-ups that failed over the last two years, many private equity and venture capital firms are under heavy pressure to lock in gains. JetBlue is one of a select group of companies able to launch a successful IPO this year. While the market has tumbled, and investors in general have stayed away from new shares, JetBlue has risen by almost 80 percent to $48.00 since its launch. Among options being looked at are a series of privately placed stock sales and one or more secondary stock offerings, said Neeleman. There are no plans to issue and sell new stock or other securities for the purpose of raising more cash for JetBlue, he said. OVERHANG JetBlue rewarded investors with better-than-expected second quarter results, including pre-tax earnings that more than doubled from the same period last year. As a result the stock is traded at a premium. As of July 25, the ratio of its stock price over expected 2003 earnings was 23.3, more expensive than Southwest Airlines' (NYSE:LUV - News) 21.2 P/E ratio -- the largest airline by market value -- and above the average P/E ratio of 14.9 for all companies traded on the Standard & Poor's 500 Index, according to research by Morgan Stanley. The lofty price, though, is also a function of demand outstripping the supply of its publicly traded stock, said William Greene, an analyst at Morgan Stanley, the investment bank which managed JetBlue's IPO. In a July 26 report, Greene applauded its second quarter earnings, though cautioned that "the potential to increase the freely trading shares by nearly five times creates a meaningful overhang." Because of that threat, Greene said he wouldn't upgrade his rating on the company from "Equal-Weight." Venture capital investors like J.P. Morgan New Air Investors LLC, Soros' Quantum Industrial Partners LDC, and BancBoston Ventures Inc acquired more than half of the stock in late 1998 for $5.27 per share. As of Tuesday, J.P. Morgan's 11.5 percent stake had a market value of about $225 million; Quantum Industrial's 15.7 percent stake was worth about $305 million; and BancBoston Ventures' (NYSE:FBF - News) holdings were valued at $106 million. Weston Presidio, an investment fund part-owned by JetBlue chairman Michael Lazarus, holds 17.6 percent, the largest stake, worth about $343 million. David Neeleman, the founder and chief executive, has an 8.1 percent stake worth $158 million, while Checkett's 246,011 shares are worth about $11.8 million at current market prices. In addition to the lock-up of 33 million shares expiring on October 9, another lock-up of another 2 million shares will expire 45 days later.