Jetblue Ipo Case

Business Finance Policy: FINA 380-01 Dr. William Brent February 3rd 2009 JetBlue Airways: IPO Valuation dishearten of Content I. Statement of Problem II. Alternative Solutions III. Analysis of the Alternatives IV. Final Recommendation V. Appendix I. STATEMENT OF THE PROBLEM David Neeleman, chief executive officer of JetBlue Airways and his forethought team have crystallised that JetBlue is still make profit despite the many challenges facing the airline attention after the September 11th 2001 terrorist attacks. Despite these positive returns; JetBlue plans on raising capital through an Initial Public oblation (IPO) to support its aggressive growth and to also offset portfolio losings to their venture capital investors. This is a simple, theoretical, but very involving labor , however the main challenge is to go through the right swirl determine for JetBlue Airways. The lead underwriter and management of JetBlue had initially reason out that price will float from $22 to $24, but realize that this will lead to an oversubscription, so the management of JetBlue has raised it to the range of $25 to $26. II. ALTERNATIVE SOLUTIONS JetBlue Airways base use many approaches to determine the right offer price for its IPO. Some of the options available to the management and lead underwriter are listed below.

Using Discounted Cash liquefy (DCF) Analysis Using valuation multiples Pricing the issue below or above the menstruation IPO price range. III. ANALYSIS OF ALTERNATIVES DCF Analysis JetBlue Airways can use a discounted cash flow (DCF) analysis to price its IPO. This is a valuation approach used to value firms. The outstrip approach will be to use the financial prognosis provided in Exhibit 13 and discount it to find the current enterprise value, then dividing this computed value by the estimated number of shares outstanding. A very important metric that should care honesty be study is JetBlues cost of... If you want to get a full essay, order it on our website: Ordercustompaper.com

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