Why Gogo Inc. Shares Plunged
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Gogo fell more than 15% Wednesday after the in-flight connectivity specialist announced that Ripplewood Holdings, one of its private equity sponsors, has distributed all of its 27.6 million shares of Gogo stock to its funds' limited partners.
Simultaneous with the distribution, three Ripplewood directors also resigned from the Gogo board.
So what: Ripplewood founder Timothy Collins asserted they still believe Gogo has a "bright future," while at the same time explaining that "This share distribution was made to provide our limited partners with greater flexibility to achieve liquidity."
In addition, Gogo pointed out that, following the distribution, board member Oakleigh Thorne and entities affiliated with him will continue to own roughly 29% of all outstanding shares.
Now what: Considering the stock has risen by nearly 60% over the past three months alone, it's hard to blame Ripplewood for the distribution. But remember Thorne, for his part, stated he remains confident in Gogo's business and with his investment in the company, indicating he has no intention of selling his own shares in the near future.
As it stands, and especially considering the broader implications of Gogo's recent certification to install its online connectivity platform in Boeing's 747-400 aircraft, I think today's pullback could be a fantastic buying opportunity for long-term investors willing to wait for the company to achieve sustained profitability.
Consider our CIO's top stock for 2014 in this free report
Gogo may have presented investors with a solid entry point today, but that doesn't mean it's the only stock worth buying. In fact, The Motley Fool's chief investment officer just selected his No. 1 stock for 2014, and it's one that could easily make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.
The article Why Gogo Inc. Shares Plunged originally appeared on Fool.com.
Fool contributor Steve Symington has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
