InvestorQ : Jet Airways has fallen sharply to nearly Rs.149 levels. It is less than 1/4th its price last year. Is downside risk limited and can I buy this stock at the current point of time?
Rashi Mehra made post

Jet Airways has fallen sharply to nearly Rs.149 levels. It is less than 1/4th its price last year. Is downside risk limited and can I buy this stock at the current point of time?

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Anjali Desai answered.
2 years ago
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Disappointing news for all Jet Airways shareholders. The shares of Jet Airways, a debt-ridden private sector carrier is experiencing poor or no growth. Today, on 2nd May 2019 the airline's shares showed downward steep movement by more than 20%. It reached the day's lowest price rate of Rs. 122.
Market experts say the reason for such price movement is due to the uninterested bidders for the private sectors on their expressions of interest, dealing to bid for the airline.
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sarah Leo answered.
2 years ago
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You need to be cautious about buying Jet Airways stock in a hurry. The only way the stock can gain some value from here is if there is a rescue plan. It is almost 2 weeks since the airline shut down its operations and there is not sign of any resolution. Neither Etihad nor SBI is willing to commit any funds to Jet Airways even after the promoter, Naresh Goyal, has stepped down from the board. In the absence of any fresh funds infusion, the airline is unlikely to be of any value as it cannot commence operations.

What is really left in the company?

One thing most investors need to understand is that a company is valued based on what it has in its books and the cash flows it can generate in the future. Both are major question marks now. For example, the SBI is already selling off the planes and the landing rights and parking lots of Jet to competitors so as to garner some value for the loans given. No investor is likely to infuse any fresh funds unless there is absolute clarity on what is still left in the airline and what is it that the buyer will get. At this point of time, even a bail out looks to be very difficult to implement. We would suggest you stay away from buying Jet stock.

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