Betting on inevitable:(HA) short nr.1 of 20

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Betting on inevitable:(HA) short nr.1 of 20

My first short is Hawaiian airlines.(HA) Price is $7/share.

There is a short term optimism about this stock,but with serious problems on the road and bad looking long term outlook.Company is again on the way to bankruptcy.

there is a short term optimism because:

number of shares sold short is low
stock is trading near all time high
company won a lawsuit against MESA airlines
their competitor Aloha went bankrupt by competing with MESA airlines
there is a seasonal flights volatility that is highest now (in June,July,August and December)

long term outlook is bad:

company went bankrupt before
company is cyclical
diminishing fuel hedges & rising fuel cost
they operate of only few cities on the west coast
rising competiton particularly from Mesa airlines
declining profitability
flat revenues
company generates negative free cash flow
their cash reserve wo'nt last long

You can check short side of my portfolio on: http://www.stockalicious.com/stock_journal/2577
You can check long side of my portfolio on: http://www.stokblogs.com/user/287/portfolio

By pelcmarek at 2008-07-03 11:14 | Stocks | pelcmarek's blog

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Quotes from 10K report

for every one cent change in the cost per gallon of jet fuel, our annual fuel expense increases or decreases by approximately $1.3 million

Jet fuel costs represented 29.9% of our operating expenses in 2007.

As of December 31, 2007, we hedged approximately 25%, 8% and 1% of our anticipated aircraft fuel needs for the first, second and third quarters of 2008, respectively, primarily utilizing heating oil future contracts

Labor and related benefit costs represented approximately 22.8% and 25.8% of Hawaiian's operating expenses for the years ended December 31, 2007 and 2006, respectively.

Our agreement to purchase Airbus A330-200 and A350XWB-800 aircraft significantly increases our future financial commitments and operating costs and creates implementation risk associated with the change from our current Boeing 767-300 fleet. In January 2008, we reached an agreement with Airbus to purchase six A330-200 aircraft beginning in 2012 and six A350XWB-800 aircraft beginning in 2017

We face multiple competitors on our transpacific routes including major network carriers such as American, Continental, Northwest, Delta Air Lines (Delta), United Airlines (United) and US Airways. ATA Airlines (ATA), a low-cost carrier, offers scheduled service to Hawaii with Southwest Airlines as a code share partner on its routes. In October 2007, Alaska Airlines initiated service to Hawaii. Aloha Airlines (Aloha) provides scheduled service to multiple mainland cities from Hawaii

Interisland routes are served by several carriers including Aloha, Island Air, Mesa Airlines (through its go! operating division), Pacific Wings and a number of "air taxi" companies

Demand levels are typically weaker in the first quarter of the year with stronger demand periods occurring during June, July, August and December.

By pelcmarek at Thu, 2008-07-03 11:36 | login or register to post comments

HA: Falling down !

As Jim Chanos said you are losing 90% time and then it comes .

I shorted this stock 3/7/2008.

Company was rising and reached it's first peak 23/7/2008 (9.33) then went down and hit it's first bottom 7/7/2008 (7.7) then it went up again and hit its peak 12/9/2008 (10.89) then it went down back to my price (7).

I didn't hold this stock for 3 months to close it now.

I can wait. I have plenty of time.

By pelcmarek at Tue, 2008-10-07 01:36 | login or register to post comments

Short nr.1

I'm closing my short position with 46% profit. Price is 3.775.

By pelcmarek at Fri, 2008-11-21 12:39 | login or register to post comments

Re:

By outdoorh at Wed, 2008-11-26 10:23 | login or register to post comments