Market Overview

Time To Follow SAC Into Gogo?


Even with an airline Wi-Fi monopoly lawsuit overhanging Gogo (NASDAQ: GOGO), now may be time to follow SAC Capital (now Point72 Asset Management) into a long position.

Shares of Gogo are down nearly seven percent to $22.07 in Thursday's session, after jumping seven percent to $26.37 in pre-market trading following the company's better-than-expected fourth-quarter results.

Shares of Gogo have traded in a wide range since opening at $16 in June of last year, going as low as $9.71, and as high as $35.77.

After topping out at $35.77 in early December, shares fell in a steady fashion. The decline can be attributed to a lawsuit re-filed by airline passengers in October that claimed Gogo had an 85 percent market share on in-flight Wi-Fi and airlines can't easily terminate Gogo agreements.

Related: Slap The Floor: Market Playing Defense

Months later on February 3, a San Francisco judge ruled that passengers had provided adequate evidence to move forward with claims that Gogo runs an unlawful monopoly. Two days later, shares found support at an old gap level from the November 8 closing price of $18.75, as investors realized the lawsuit risks had been potentially fully priced in.

On February 28, Gogo fought back and asked for a jury trial to dismiss monopoly claims by passengers. In a 13-D filed March 6, the former SAC Capital announced a 4.3 million share, or 5.1 percent stake in Gogo, which sent the stock higher in after-market hours.

For now, money managers and investors may be looking past the lawsuit in order to invest in a company that has a strong position in the airline Wi-Fi service; or a monopoly, as passengers call it.

Posted-In: Point72 Asset ManagementNews Trading Ideas


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