Jetblue Airways

My neighbor called me the other day and she said, "You have an interesting little boy." Turns out, the other day she asked my son Daniel what he wanted for Christmas. And he said, "I want some stock." "Stock?" she said. "Don't you want video games or anything?" "Nope," he said. "I just want stock. JetBlue stock."

- David Neeleman

CEO and Founder, JetBlue Airways

It was April, 2002, barely two years since the first freshly painted JetBlue plane had been rolled out at the company's home base at New York's John F. Kennedy Airport (JFK). JetBlue's first years had been good ones. Despite the challenges facing the US airline industry following the terrorist attacks of September 2001, the company remained profitable and was growing aggressively. To support JetBlue's growth trajectory and offset portfolio losses by its venture capital investors, management was ready to raise additional capital through a public equity offering. Exhibits 1 through 4 provide selections from JetBlue's IPO prospectus, required by the SEC to inform investors about the details of the equity offering.

After nearly two weeks of road show meetings with the investment community, the JetBlue management team had just finished its final investor presentation and was heading for Chicago's Midway Airport. With representative of co-lead manager Morgan Stanley and the JetBlue board patched in on a conference call, it was time for the group to come to an agreement on the offering price of the new shares. The initial price range for JetBlue shares, communicated to potential investors was $22 to $24. Facing sizable excess demand for the 5.5 million shares planned for the IPO, management had recently filed an increase in the offering's price range ($25 to $26). But even at that price range, most of the group thought the stock faced "blow-out" demand. After months of preparation, it was time to set the price. The underwriters were anxious to distribute the shares that evening, and NASDAQ was prepared for JBLU (the company's ticker symbol) to begin trading on the exchange in the morning.

JetBlue Airways

In July 1999, David Neeleman, 39, announced his plan to launch a new airline that would bring "humanity back to air travel." Despite the fact that the US airline industry had witnessed 87 new airline failures over the previous 20 years, Neeleman was convinced that his commitment to innovation in people, policies and technology could keep his planes full and moving. His vision was shared by an impressive new management team and a growing group of investors. David Barger, a former vice president of Continental Airlines, had agreed to become JetBlue's president and COO. John Owen had left his position