I Just Bought More Airline Stock And Here Is Why?

I just bought more Airline Stock, specifically delta. ( and everyone online is saying to sell or not buy, but right now might be a perfect time)

1. But you know what they say ( every favor comes with strings attached) Focus on delta not too broad
- Pay it back in 10 years 30% of it ( since 70% is going to employees) Delta got 5.4 billion including a 1.6 billion loan )
- Cannot engage in stock buybacks until 12 months after the loan has been repaid
- Cannot pay dividends until the loan has been paid back 12 months after
- Cannot reduce employment at all until Sep 30th and after not by more 10% ( 80k employees and can cul 8k )
- The Treasury will also receive stock warrants worth 10 percent of the loan amount that exceeds $100 million. ( 1% of delta stock at $24.39 of 5 years)

Example: take a lot at JP morgan during 200k, it dipped from 40 to 20 buck and now it's at 92.

1. warren choice :
- Warren bought 45.3 million dollars worth of delta stock (11% stake) on February, for a total 976k shares at $46 per share
- Delta is currently trading for 22-24$ per share ( that almost a 50% loss)
- And they’ll have to borrow 10 billion dollars in debt from the fed to stay afloat, and they’ll have to pay it back
- ( I think this screams high risk, the business has to change the way it operates, people might not fly the same for a while, the business will have extra debt expenses)
- Plus not to be morbid, but warren is 89 years old, by the time airlines discover it might be a long time from now
( history shows, stock market closing for 4 months, it shows 20 years of pure losses in the past, and warren experienced all of that, so I think his perspective is different )
- And I think the intrinsic value for these companies has changed a lot since warren buffet initial calculations.

Tip: Then I’m going to make the profits that warren lose out on. ( it would take a 100% gain for warren to get his money back

2. why I bought more:
- I’m the guy warren sold for half the price of what he bought
- So if I’m holding on to a solid company, that can run efficiently and will recover in time

what I see happening
- The company won't be able to buy back their stocks ( artificially will keep prices low for a few months )
- They cant give any dividends until September ( a lot of buyers want quick cash)
- I also see a lot of people maybe being laid off, if management decided to sell or liquidate some of its aircraft)
( remember if only 50-80% of the people are flying but you have the same amount of plains that is also a liability.

Details:
- The company bring in annual 45 billion and spend 36 billion to make it back and its net profit is 3.5 billion

Bet: they’ll recover in less than 10 years

3. My portfolio set up
- Although this is a perfect set up for a come up ( or quick money)
- It's also a risky one
- So that’s why my position on delta will not likely past more than 20% of my portfolio

My next investments

- My next investment is more delta stock
- Because when the storm has passed I predict a lot of stock buybacks, which then gas up the prices
- Will I sell ( very unlikely, I’m willing to hold my position for the next 10 years)

- Unless new information makes it way

Articles:
Care Act: https://www.foley.com/en/insights/publications/2020/04/cares-act-aviation-industry-loan-and-grants
More Info: https://www.fool.com/investing/2020/05/02/warren-buffett-said-he-was-wrong-about-airlines-wa.aspx

* PRO TIP*
INFORMATION IS EVERYTHING