Gogo continues plunge; AT&T suggests it'll price aggressively


Gogo (GOGO -29.1%) has crashed to levels last seen in September as the Street mulls AT&T's plans to launch a rival in-flight Wi-Fi service. No downgrades have come in, but JPMorgan has used the occasion to lower its PT to $23 from $28. The firm upgraded Gogo to Overweight less than two weeks ago.

Remarks from AT&T execs pointing to aggressive pricing aren't helping Gogo's cause. Strategy chief John Stankey: "We think there’s an unmet need ... we think there’s an opportunity to get more people using the service at a more affordable price." Stankey also says AT&T will (with a partner's help) complement its air-to-ground service with satellite service when a plane is over water.

William Blair is defending Gogo: The firm thinks regulatory approval for AT&T's network could take time, particularly since Gogo has all of the spectrum licenses granted to this point for air-to-ground in-flight Internet.

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Comments (17)
  • vpg999
    , contributor
    Comments (142) | Send Message
     
    no way GOGO can withstand this, the model is broken now, stock gapped down $2 when they lost WestJet to Panasonic in Canada, now this is coming, expect ATT subs to get WIFI included in their bundles, say goodbye to the model, GOGO will go BK.
    29 Apr 2014, 03:20 PM Reply Like
  • grep
    , contributor
    Comments (3) | Send Message
     
    vpg why do you think the model is broken? when their growth is 40% YOY and technology upgrades are above or meeting industry standards.
    7 May 2014, 05:13 PM Reply Like
  • Tedhoffman
    , contributor
    Comments (15) | Send Message
     
    William Blair is defending Gogo: The firm thinks regulatory approval for AT&T's network could take time, particularly since Gogo has all of the spectrum licenses granted to this point for air-to-ground in-flight Internet.
    29 Apr 2014, 03:52 PM Reply Like
  • EquityTrader1975
    , contributor
    Comments (409) | Send Message
     
    att is a year away form billing anyone-oh hey im going to open an NBA team tomorrow!
    29 Apr 2014, 04:39 PM Reply Like
  • NSmytheson
    , contributor
    Comments (84) | Send Message
     
    This is one of the most hideous overreactions I've ever witnessed. GOGO was pretty much a monopoly until yesterday, and is already significantly ahead of any potential competition.
    29 Apr 2014, 05:04 PM Reply Like
  • Mo Money 2011
    , contributor
    Comments (78) | Send Message
     
    Yes, I don't understand the overreaction too. It will take time and effort, even for a big player like AT&T to get into this highly regulated industry where incumbents already have the planes wired up and airlines have already made those fit or retrofit investments. I bought 10 calls at the $14 strike price... we'll see how the animal spirits react rest of week on GOGO
    29 Apr 2014, 05:46 PM Reply Like
  • glssmrbl
    , contributor
    Comments (1284) | Send Message
     
    not sure if this is worth getting long with such a crash.
    1 May 2014, 10:03 AM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
     
    Mo money calls = No Money
    29 Apr 2014, 06:19 PM Reply Like
  • just read the instructions
    , contributor
    Comments (747) | Send Message
     
    How can such a competition build up "over night"? Souldn't it been known to GOGO,mentioned in the risks and commented on by analysts? AT&T is really not a nobody in telecommuncation and if the capex are "not material" the technology to convert their service not complex.
    29 Apr 2014, 06:47 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
     
    Just read,

     

    Because stocks are "forward looking"

     

    At least most of the time.

     

    GOGO, going nowhere. Besides maybe down.
    29 Apr 2014, 06:50 PM Reply Like
  • 5s
    , contributor
    Comments (2) | Send Message
     
    I'd first like At&t to provide better ON Ground service in my area, which is located in the heart of the Silicon Valley and for which I pay $104 for 2 lin...lines. Lost 4G Signal again..
    30 Apr 2014, 05:56 AM Reply Like
  • Tedhoffman
    , contributor
    Comments (15) | Send Message
     
    5s... So true...
    30 Apr 2014, 11:53 AM Reply Like
  • Tedhoffman
    , contributor
    Comments (15) | Send Message
     
    Gogo is a leading aircraft communications service provider to the global aviation industry. Using Gogo's exclusive products and services, passengers with Wi-Fi enabled devices can get online on more than 2,000 Gogo equipped commercial aircraft. In-flight connectivity partners include AeroMexico, American Airlines, Air Canada, AirTran Airways, Alaska Airlines, Delta Air Lines, Japan Airlines, United Airlines, US Airways and Virgin America. In-flight entertainment partners include AeroMexico, American Airlines, Delta Air Lines, Japan Airlines, Scoot and US Airways. In addition to its commercial airline business, Gogo has more than 6,300 business aircraft outfitted with its communications services. And Gogo has all of the spectrum licenses granted to this point for air-to-ground in-flight Internet.
    They also have rigid ten year contracts with the airlines. They may go out of business but it certainly won't be today.
    30 Apr 2014, 01:44 PM Reply Like
  • Michael's stock list
    , contributor
    Comments (29) | Send Message
     
    I am in the "confused" state of mind here. I purchased 100 shares of GOGO at ~$20/sh last year when I first found out about them.
    I have always thought ... why isn't AT & T or Verizon doing this? This week we all found out that AT&T is looking to break in to this business. I do not think GOGO is gone-gone, but with the reduced price, it would make a ripe takeover target by AT & T. This way they will receive all of the "rigid ten year contracts" and everything else at a bargain price.
    30 Apr 2014, 05:48 PM Reply Like
  • glssmrbl
    , contributor
    Comments (1284) | Send Message
     
    great point! but AT&T could wait longer for more beatdown in the stock.
    1 May 2014, 10:05 AM Reply Like
  • Tedhoffman
    , contributor
    Comments (15) | Send Message
     
    AT&T is famous for being the mega deal company although this would fall into the mini deal for them. It's an interesting thought...
    1 May 2014, 11:31 AM Reply Like
  • Mo Money 2011
    , contributor
    Comments (78) | Send Message
     
    I am holding my calls thru mid May expiration
    1 May 2014, 11:55 AM Reply Like
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