• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing

Shark Bites: Gogo Looks Ready to Fly

There has been some talk that GOGO could be a target of private equity.
By JAMES "REV SHARK" DEPORRE
Dec 01, 2020 | 11:02 AM EST
Stocks quotes in this article: GOGO

Gogo Inc.  (GOGO) provides in-flight broadband connectivity and wireless entertainment services for the aviation industry. It has operated in two main segments. Commercial airlines (CA) and business aviation (BA). The CA sector has struggled and has been financed largely by the profitable BA sector.

In August GOGO entered into a deal with bankrupt Intelsat to sell its CA division for $400 million. It was announced that that deal closed today. This has several positive aspects. It should allow GOGO to become cash flow positive, it makes it simple to refinance its debt, and it preserves substantial Net Operating Losses (NOLs).

There has been some talk that GOGO could be a target of Private Equity. Private equity firm GTCR LLC already owns around 15% of the company and has an option to increase that ownership.

The closing of the deal with Intelsat has occurred much sooner than anticipated and should accelerate the transformation. The CEO of Gogo, Oakleigh Thorne, commented:

"The sale of our Commercial Aviation division to Intelsat is transformational for Gogo and remains on track for closing. The Transaction will give us the ability to de-lever, generate positive free cash flow, take advantage of our substantial NOL carryforwards, and invest in strengthening our Business Aviation franchise. The rapid recovery in BA is a testament to the strength of our business."

"William Blair analyst Louie DiPalma noted that Gogo completed the sale of its commercial inflight connectivity division to IntelSat for $400M in cash, telling investors that he views the "new Gogo" as "essentially a high-margin monopoly for the business jet inflight connectivity market." The company's EBITDA margin is high due to the fact that for small and midsize business jets, "Gogo is the only viable option," He reiterates an Outperform rating on Gogo shares, adding that he sees significant upside despite the stock having already gained significantly in value."

I've been building a GOGO position and plan to add to it as it develops further.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, James "Rev Shark" DePorre was Long GOGO.

TAGS: Investing | Stocks | Technical Analysis | Trading | Airlines | Technology

More from Investing

Rotation Is No Reason to Turn Away from the Markets

James "Rev Shark" DePorre
Jan 21, 2021 4:45 PM EST

Bears may fuss over the routine consolidation combined with rotational action, but here's how I look at the moves.

Jim Cramer: Housing Is Our Bridge

Jim Cramer
Jan 21, 2021 3:59 PM EST

Do not fear the housing sales boom -- this is good news and I'll tell you why.

Cord-Cutting FuboTV and Advertising Platform PubMatic Are Not Buys Here

Bruce Kamich
Jan 21, 2021 2:59 PM EST

Our look at the stocks of both FUBO and PUBM.

Jim Cramer: You Just Won Powerball, Now What?

Jim Cramer
Jan 21, 2021 2:24 PM EST

Remember, you only need to get rich once.

Here's the Beast and Beauty of Investing in Disney Now

Bruce Kamich
Jan 21, 2021 1:54 PM EST

DIS might suffer a pullback in the next several weeks, but longer-term a rally is possible, according to the charts.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:16 AM EST CHRIS VERSACE

    Worst Stocks to Buy for the Biden Presidency

    Biden's take on the minimum wage, likely moves on ...
  • 08:35 AM EST GARY BERMAN

    Thursday Morning Fibocall for 1/21/2021

    SPX (Long-Term View) The 1/20/21 NEW high @ 3859...
  • 11:38 AM EST CHRIS VERSACE

    Best Stocks to Buy for the Biden Presidency

    President-elect Biden's massive stimulus plan, int...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login