MINNEAPOLIS, Minnesota USA, 7 January 2014 /ASNewswire/ - Eureka Airlines schedules IPO for 2014-01-09
Eureka Airlines, the largest passenger airline operating out of Minneapolis-St. Paul International Airport (MSP) announced that an initial public offering will occur on Thursday, January 9 2014. The airline offers three-cabin service on it’s fleet of Boeing 737-600 and 737-900 jets to popular destinations across the United States and Canada and operates in global partnership with All Worldwide Unite.
Eureka has maintained a strong financial stance since it’s founding in late November, with margins consistently above 50%+ and steady revenue growth of +20% WoW. Seat load factors have remained near 100% and the airline has seen strong demand for it’s recently launched cargo services. For more details, see the end of the release.
Following the success of the IPO, Eureka plans to utilize it’s strong feeder network to expand into Mexico and Western Europe with Boeing 737-900 HGW jets.
“We’re committed to delivering continued returns to our investors as we continue to grow and enhance Minneapolis-St. Paul’s #1 airline,” said justpetehere, Managing director of Eureka Airlines and it’s parent, Eureka Holdings.
For interested investors, please visit the Aspern “Markets & Exchanges” page on Thursday 2014-01-09 after 3:00am MSP HT (CST). For additional details, please contact justpetehere.
Waiting until after the close of business this week to start the listing. Just wanted to give folks a heads up in advance in case they want to save a little extra to invest :). I’ll post again once it’s listed.
And yes, I’m charging as much as possible for as long as possible with a focus on high margin routes. Additionally, only a few airlines are offering first class so just using a row or two can really help margins, provided that your feeder network is strong enough to keep loads up!
Seem to be doing well for yourself. :) You seem to be a smart player, so I'll toss this question your way. Why do an IPO so early? I suppose it helps you get some more money to try and beat competition early, but I've always thought there's more to gain in holding off on IPOs until later, when they are more likely to succeed and everyone has more money to be able to invest in your company. Additionally, listing an IPO limits some things you can do with your holdings and subsidiaries, especially if you want to finance a feeder/regional airline from a larger airline. Is it just the need/desire for more capital to boost the number of planes in your fleet?
That's a great question. A few thoughts that I've been going through (please call me out if these are wrong assumptions!):
In terms of whether it succeeds or not, there's no downside risk if the IPO fails. The only thing you lose is the time it took to set up the IPO and you can always try later. The bigger risk is giving up potentially higher subscriptions which would boost the windfall of the IPO (just barely succeeding vs. succeeding way oversubscribed). Not a huge risk IMHO.
While companies may have more funds later to invest, there will also be more competition in the IPO market. Plus, the absolute value of the capital will scale, meaning more and more will be needed to make the IPO a success.
While the absolute value of the investment might be larger later in the company's growth, it's all relative. You'll always get the same percentage of your value, so it's a question of whether you think they're be more value in a smaller windfall earlier (to likely expand in your core markets and edge out competitors early) or get a larger windfall later (to likely make bets into markets that require higher upfront capital, e.g., 747s and access markets competitors can't afford yet).
I disagree a little with the reduction in open opportunities for future growth. Once you IPO your holding company receives a large portion of your dividend which you can then use to make additional investments or begin additional subsidiaries. Because any new subsidiaries are held completely separately, you're free to experiment a bit without jeopardizing the fundamentals of your core business (e.g., launching a lower margin regional or cargo business). To me, it feels nice and clean to keep these separate and I can afford to make more mistakes.
Personally, I'm pretty new to the game, so I'm IPOing in order to add capital for new planes and to start a flow of dividends to my holding so I have some flexibility to experiment for fun :). It is a bit on the early side, but I'm hoping the low price make it a good opportunity for folks, especially since the high margin = a hefty weekly dividend!
The IPO has met the minimum subscription requirement and will succeed! THANK YOU to everyone who has entrusted their capital in Eureka, especially this early in the game.
There are still 30+ hours remaining, so don’t miss this opportunity to purchase shares of the top airline in MSP with high growth potential and solid dividend returns!
Update: With 17 hours left, the IPO is currently at 100% subscribed. There's still a great opportunity to purchase shares--up to 142,796 more! Eureka currently offers the higher return on equity in the IPO market (excluding an airline that is listed as reported to AS). Based on current profits (which are growing 33% a week) you'll be receiving $37,000+ in dividends for each 10,000 shares you buy.
Thank you to everyone who has participated and we look forward to delivering solid financial performance to our investors!