FLT chart, page-280

People who are concerned regarding the capital raising happened last year and ownership dilution, my answer is - it’s not that simple. There are a lot of retail investors who are starting to incur losses by selling short and buying back higher therefore you will see a lot of down ramping by so “been holding long time ago investors” a.k.a shorters.

Valuation explained:
Pre COVID FLT had around 100M of shares outstanding and let’s take a share price of $40 per share. That gives us a market cap valuation of around $4B.

In a middle of pandemic they had to raise nearly $1B of capital by nearly doubling their shares outstanding and issuing debt notes.

Flight Centre current market capitalisation is $4.28B This leaves impression to some amateur short sellers that this is screaming overvalued since the market cap is already pre COVID levels. “It can’t go any higher!” “Market is wrong I am right” “I am the next hedge fund manager predicting doomsday crash”.

It’s not a stock split. You can’t say it’s simple arithmetics because they doubled their shares. Share price will go to $30 and beyond no doubt. Why?

1.This is not a stock split, company raised hundreds of millions of dollars and had pre COVID capital expenditures maintained. This capital power will provide
opportunity to capitalise on recovery.
2. Company is very diverse leisure and corporate travel business who is already being cash flow break even in U.S. The last region making losses will be ANZ.
3. What makes you think the company wasn’t undervalued during pre COVID levels when they had record performance in first half of FY2020?

there are plenty of tech stocks where shares increased from 100M to some 500M and they do at least two or three capital raising a throughout the year, extremely diluting the ownership, burning cash. Not preserving. However their share prices are all time high.

To conclude: this is beginning of hard beaten Australia tourism industry. There is no other way than going up. The company has perfectly positioned itself to capitalise on recovery. Anything else than that it’s just shorters spitting out toilet water