Continental Airlines I Case Solution
On April 9, 1999, Gordon Bethune, chairman and CEO of the prestigious Continental Airlines, reviewed a memorandum to the business's board of directors urging a repurchase (stock buyback) of up to $500 million of common stock. Telling would be, assuming board acceptance, accompanied by the statement of the buyback with first quarter net income of $78 million to the investment community of the 16th consecutive profitable quarter of Continental.
The airline, based in Houston, Texas, was the fifth biggest U.S. airline, based on revenue passenger miles, and had only logged yet another year of record sales and gains. At the April 9, 1999, closing market price of $40.88, the $500 million repurchase would reduce the number of shares owed by 12.2 million shares, or 16% (on a fully diluted basis). Bethune considered the greatest signal of management's present expectations for the continuing strong financial performance of Continental was to declare a major stock buyback plan.
This is just an excerpt. This case is about FINANCE & ACCOUNTING
PUBLICATION DATE: October 01, 1999
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