Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

JetBlue IPO Valuation

No description
by

Alix DiMercurio

on 21 February 2013

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of JetBlue IPO Valuation

Presented By
Alexandra DiMercurio
Jennifer Heath
Tara Luke
Nathan Pfeiffer JetBlue IPO Valuation Introduction Valuation Sensitivity Analysis Alternative Scenarios Cost of Capital How a change in certain variables affect value: If IPO does not float at desired price: Initial Public Offering (IPO) At what price should JetBlue offer their shares? Discounted Cash Flow Valuation/Share Price Growth Rate Risk Free Rate Change in number of shares If IPO Does Not Float Withdraw
Delay
Decrease Price
Decrease Quantity of shares Increase in shares decreases value per share
Decrease in shares increases value per share
Signals to investors:
Asymmetric information
Meek outlook
Scare investors, reduce demand JetBlue Background Questions/Response Advantages/Disadvantages IPO Process Beta Founded in 1999 by David Neeleman
1999: $4 billion order for 75 A320 aircraft
2000: One-millionth customer and first $100 million
2001: Expand services and launches
2002: Announces IPO Advantages
financial gain in raising the company's capital
more funding for research, debt, etc.
increase public awareness of the company
Disadvantages
possible decision errors due to unsound analysis
heavily regulated
cost associated with complying to regulations
switch from long-term focus to short-term usually takes about 3 months
prerequisites to fulfill before equity-issuance process
hold meeting to map & agree upon process
"quiet period"
SEC reviews registration statement
surveying potential investors
negotiation of final offering price Cost of Debt Cost of Equity: CAPM Weights of Debt and Equity = 5.00%+1.1(5.00%)=10.50% $1,842/$17,913.99= 10.28% 1-.1028 = 89.72% WACC = 10.28%(.0425)(1-.385)+89.72%(.1050) = 9.8575%
Full transcript