JetBlue: Prepare for Financing

The CFO of JetBlue is trying to decide which of two financing proposals to pursue. A straight equity issue will dilute his principal shareholders' ownership, but seems like the safer alternative in an industry that is notorious for its high failure rate. On the other hand, a convertible debt alternative seems less dilutive, and cheaper, but brings with it an increased risk of default and financial problems. Which option should John Owen pursue?
Collection: HBSP (USA)
Ref: HBS-207061-E
Format: PDF
Number of pages: 16
Publication Date: May 2, 2007
Language: English
Review date: Jul 9, 2007

Description

The CFO of JetBlue is trying to decide which of two financing proposals to pursue. A straight equity issue will dilute his principal shareholders' ownership, but seems like the safer alternative in an industry that is notorious for its high failure rate. On the other hand, a convertible debt alternative seems less dilutive, and cheaper, but brings with it an increased risk of default and financial problems. Which option should John Owen pursue?
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Year: 2003
Geographic Setting: United States
Industry Setting: Airlines

JetBlue: Prepare for Financing

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"JetBlue: Prepare for Financing"