'Go Time' on Gogo Inc
If you have traveled on an airplane in the past year or two you have noticed or possibly gave money to Gogo Inc. (GOGO).
Gogo is a volatile stock to own. The short interest on Gogo has been out of control for over a year now, this time last year it was over 50%. Today short interest is between 25 and 30%. The interest has remained high regardless. Gogo has been trading on headlines. You get a good one, stock bounces 10%. It's a shit story and the stock falls 15%. Up, down, up, down. The 1 year chart on it is madness. Forget the one year, any chart on Gogo is bonkers.
It's not safe is the overall story:
Gogo Inc. provides in-flight Internet connectivity and wireless in-cabin digital entertainment solutions in the United States and internationally. Currently there are 4 analysts that rate Gogo a buy, 1 analyst rates it a sell, and 2 rate it a hold.
Gogo could get bought out. Gogo could be crushed by a major internet company that has its eyes on airplaine connectivity (The AT&T scare earlier this year). Gogo could go bankrupt. When will Gogo be profitable? Can Gogo handle their debt? The short interest is manipulating the share price.
These consistent themes have caused the stock to move like a sine wave in 2014 and YTD it's down 33%. Gogo is not your old man stock. This is a swinging speculative growth stock that can only be handled by cool cats, i.e. Black Belt Jones.
What I hate about the stock is the debt. Gogo ended Q3 with $243M in cash, and $314M in debt.
They continue to score partnerships, last month it was with United. I'm waiting for them to implement a cheaper in-flight offering for text only. This just did this with T-Mobile customers and you can do it for free starting Sept 17th. I want to see Gogo charge for this service and do this with all carriers. If only they could go right to Apple (AAPL) have a iPhone unique offering (if possible). Just do something, think outside the box. That would rake in the cash and convince Wall Street growth and profitability is credible. This free shit is not helping the share price. I don't care how much T-Mobile is paying Gogo. Build the customer base, make mo money. Rinse, lather and repeat.
Mastery Bottom line:
Gogo is a risky play but at $16 and change I like the odds.
It could crash or skyrocket on any media attention.
Lock your stop/loss limits and let it fly.
Disclaimer: The author has a long position in GOGO.
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