Analyst Note| Dan Wasiolek |
We were surprised by Sabre’s Aug. 20 filing for up to $300 million in potential periodical equity sales (10% potential lift to shares outstanding), sending shares down 8%. In our view, Sabre has enough liquidity in a zero-demand environment for around a year, and probably at least two years at second-quarter 2021 demand levels. This stance is buoyed by Sabre last communicating a monthly cash burn figure of $80 million in a zero-demand environment during its earnings call on Nov. 6, 2020. Since then, management said on its Feb. 16, 2021, earnings call that it expected cash burn to improve throughout 2021. On the Aug. 3, 2021, call management said cash burn improved sequentially and that Sabre had $1.1 billion in cash on the balance sheet, with no debt maturing until 2024 and no significant uses for cash in the near term.