(Last word on) Porter's finances: Only Deluce knows for sure
Rob:
I am beginning to suspect that we might be the
only ones in Toronto that find Porter's financial situation of interest, but
here goes a rebuttal.
I maintain that there are strong indications that
Porter is in deep financial trouble, and as evidence I listed things like the +
$40 million financial loss admitted to in the 2010 prospectus, the decrease in
the number of passengers since the summer of 2010 and the competition from Air
Canada that will start in May of this year.
You countered with a rosy prediction, and then go
on to cite the financial problems of Air Canada. What does that
have to do with Porter? Air Canada is a public company with deep
pockets and the ability to raise money on the stock exchange. Porter is
still a private company and that makes it much more difficult for it to
raise money.
Your final argument is that Porter's 30%
discounts are an advantage to the company. "People like to buy at a
discount," you say. "So what?" is my rejoinder. At the same
time that the Porter discounts have been in effect, the number of passengers
have been going down. The discounts don't seem to be working.
But look, Rob my friend, I think I am willing to
admit that, although this is fun, it is all speculation. The only person
who knows Porter's true financial situation is Robert Deluce and he's not
talking.
Still, one bit of advice as a
friend. If you are an investor, I would respectfully submit that you would
be better off keeping your money safely in the bank, rather than
"taking a flyer" on Porter.
Bill Freeman
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