MESA Overview

Upcoming Stock Splits: The week of November 24 to November 28 will see several stock splits, including reverse splits from companies like Meihua International Medical Technologies, Mesa Air Group, BiomX Inc., and Lion Group Holding, aimed at maintaining compliance with exchange listing requirements.

Meihua International Medical Technologies: This China-based company will implement a 1-for-100 reverse share split effective November 24 to comply with Nasdaq's minimum bid-price requirement.

Mesa Air Group: The U.S. regional airline will execute a 15-for-1 reverse stock split on November 24 as part of its strategy to meet exchange listing standards ahead of a merger with Republic Airways Holdings.

BiomX Inc. and Lion Group Holding: BiomX will conduct a 1-for-19 reverse stock split on November 25 for compliance, while Lion Group will implement a 1-for-13 reverse ADS split on November 26 to meet listing requirements.

Financial Performance: Mesa Air Group Inc. reported a loss of -$14.124 million for the third quarter, an improvement from a loss of -$24.917 million in the same period last year.

Earnings Per Share: The company's earnings per share (EPS) were -$0.34, compared to -$0.60 in the previous year.

Revenue Decline: Revenue decreased by 21.3% to $90.676 million, down from $115.257 million year-over-year.

Fiscal Year Change: The Mesa Board approved a change in the company's fiscal year-end from September 30 to December 31, effective January 1, 2025.

Merger Approval: Mesa Air Group shareholders have approved the merger with Republic Airways Holdings, which is expected to enhance the scale and stability of the combined company, pending regulatory approvals.

New Company Structure: The merged entity will be named Republic Airways Holdings, trading on Nasdaq as RJET, with Republic shareholders holding the majority of shares and Mesa shareholders owning between 6% and 12%.

Operational Continuity: The combined company will continue to operate under agreements with major airlines like American Airlines, Delta, and United, with Mesa's operations primarily supporting United under a new 10-year agreement.

Financial Outlook: The merger is projected to generate an annual revenue run-rate of $1.8 billion to $2 billion, and Mesa Air's stock has seen a 44% increase year-to-date, making it the top-performing U.S. airline stock.

Impact of Government Shutdown: The U.S. airline sector faced significant disruptions due to a government shutdown, resulting in a shortage of air traffic controllers and mandated flight reductions by the FAA, which required airlines to cut flights by up to 10% to ensure safety.

Flight Cancellations Overview: An analysis revealed that approximately 11,000 flights (about 6.5% of total) were canceled since the FAA's flight reductions began, with regional airlines experiencing the highest cancellation rates as major carriers aimed to minimize passenger inconvenience.

Performance of Airlines: Low-utilization carriers like Allegiant and Sun Country performed relatively well during the disruptions, while SkyWest faced the highest cancellation percentage at 11% of its flights. Major airlines like Delta and American canceled around 2,900 and 2,800 flights, respectively.

Market Insights: Mesa Airlines showed the best year-to-date share price return in the sector, while American Airlines had the lowest forward price-to-earnings ratio. Analysts noted that the advance notice of flight reductions helped airlines manage costs better compared to sudden cancellations.

Market Overview: Stocks experienced a rebound on Monday, with the Nasdaq 100 rising over 500 points (2.2%) after a tough week, while Bitcoin saw a slight increase of 1.6% after a 7% drop last week.

Tech Stocks Performance: Major tech companies like Nvidia, Alphabet, and Tesla saw significant gains, with Nvidia up 6%, Alphabet up 4%, and Tesla also up 4%, indicating a recovery in the tech sector.

AMD's Analyst Day: Advanced Micro Devices (AMD) is set to hold its first analyst day since 2022, with expectations for a positive forecast and progress in AI, as the stock has risen 41% in three months.

Airline Industry Challenges: The airline sector faced difficulties with nearly 2,000 flight cancellations amid a shutdown, while Mesa Air and Southwest saw gains, contrasting with declines for JetBlue, Delta, United, and American Airlines.

US Treasury Loan Update: Mesa Air Group has amended its Loan Agreement with Jefferies, extending the maturity date to November 28, 2025, reducing the interest rate to 0% for 90 days, and decreasing the principal by $12.3 million, while providing collateral in the form of cash and an aircraft engine.

Merger Update: Mesa Air Group is set to merge with Republic Airways, with a special stockholder meeting scheduled for November 17, 2025, and the merger closing anticipated on November 19, 2025, creating a combined company expected to generate annual revenues between $1.8 billion and $2.0 billion.

Financial Performance: For the first half of 2025, Republic Airways reported approximately $169 million in adjusted EBITDA, while Mesa generated $14 million, totaling $183 million, with expectations of continued strong performance in the second half of the year.

Net Operating Losses (NOL): Mesa has significant federal and state net operating losses totaling approximately $277.6 million and $150.6 million, respectively, which will be factored into the Net Debt Amount calculation at the merger's closing, potentially impacting shareholder value.