Republic Airways (RJET) Stock: Bankruptcy Sends It Down

Republic Airways Holdings Inc. (NASDAQ: RJET)

Republic Airways had an incredibly hard day in the market on Friday, and for a very good reason. The company made an announcement that it is in the process of filing bankruptcy. Today, we’ll talk about the bankruptcy, what we’re seeing in the market as a result, and what we can expect to see from RJET moving forward. So, let’s get right to it.

RJET Files For Bankruptcy Protection

Republic Airways has been struggling for quite some time. However, the hard times reached a climax recently when the company announced that it has made the decision to file bankruptcy. It was announced on Friday that the company filed for Chapter 11 bankruptcy protection. RJET currently operates Chautauqua Airlines and Shuttle American Corp. According to the announcement, the company filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York. According to the report, Republic Airways will continue to operate as finances are restructured. Carleton English wrote the following statement with regard to the company in a Real Money article on TheStreet:

Difficulties had been building at Republic for some time… In a call with analysts in November, which reflected third-quarter results, management acknowledged that its results were negatively affected by pilot labor shortages, driven in part by labor disputes, idled aircraft, and – quite telling- fees associated with restructuring efforts with key stakeholders.”

How The Market Reacted To The News

As investors, we have learned that any time news is released with regard to a publicly traded company, we can expect to see movement in the market. Naturally, bad news leads to poor movement and good news leads to strong gains. Of course, this particular case includes incredibly bad news. After all, filing for bankruptcy protection is a big step for any company that shows that the company is likely struggling far more than investors thought. As a result, we saw massive declines on RJET on Friday. By the end of the trading session on Friday, RJET had fallen to $0.92 per share after a loss of $2.52 per share or 73.26%.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bearish expectation with regard to what we can expect to see from RJET moving forward. While the company has been struggling for quite some time, I have to say that we’re likely seeing a trend that’s going to last for quite a bit longer. The reality is that the company is in the first phase of bankruptcy. The bankruptcy process is generally one that takes a long time to go through, and will lead to incredible uncertainty with regard to the future direction of the company. If there’s one thing that scares investors more than anything else, it’s uncertainty. So, the current problems the company is facing, in combination with overwhelming uncertainty, are likely to lead to massive declines in the value of the stock. If you think $0.92 per share is low, just wait to see what happens moving forward!

What Do You Think?

Where do you think RJET is headed moving forward? Let us know your opinion in the comments below!

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