Hey everyone, Dylan Jovine here from Behind the Markets, and today, let's have a candid chat about a recent setback we faced with Spirit Airlines. 🛫 It's crucial to reflect on our losses to emerge as better investors, so I'm diving into the details of what went wrong and what valuable lessons we can extract from it.
In hindsight, the focus was too narrow on whether the deal would go through, creating a national low-cost competitor to the dominant four airlines. While that seemed promising, I overlooked examining Spirit as a standalone business. The jet engine troubles, grounding 41 planes in December alone, and a lease sale-leaseback transaction were clear indicators of the business's deterioration during the review process.
In the game of investing, constant improvement is key. Drawing inspiration from the likes of Michael Jordan, I recognize the need to enhance my game by understanding the full battlefield. It's not just about being right or wrong in a single stock but mastering the craft at the highest level.
So, what's next for Spirit Airlines? The possibilities range from survival and turning the corner to acquisition or potential bankruptcy. The current dynamics in the airline industry, especially with Frontier in the picture, add an interesting layer of game theory.
While the future for Spirit remains uncertain, I made the decision to exit the deal as the odds of bankruptcy reached a level that didn't align with my risk tolerance. It's a tough call, but sometimes it's necessary to cut losses and regroup for the next opportunity.
Join me in this open and honest discussion about the ups and downs of investing. We'll navigate through, learn from our experiences, and come back stronger next time. Thanks for being part of this journey. Hang in there, and let's keep striving for success!
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24 июл 2024
