Gogo stock pops on news of strategic review, cost-cutting
Gogo Inc. shares jumped about 7% in after-hours trading Thursday, when the in-flight Wi-Fi company said it was reviewing potential “strategic alternatives” and looking to cut costs. Gogo said it was looking to reduce cash burn by $100 million in 2019 and an additional $100 million in 2020, and looking to cut spending on its commercial-aviation business by nearly 20% by the end of 2020. Gogo said it hopes to break even on a free cash flow basis in 2020, and was “reviewing multiple options” on convertible debt that becomes current in March of 2019. The company also said it would consider strategic and financial alternatives suggested by “various strategic and financial parties,” including splitting its commercial- and business-focused segments. Gogo stock has been slammed amid financial troubles that led to the CEO’s departure earlier this year; he was replaced by the company’s largest investor. Gogo shares have dropped 57.3% so far this year, while the S&P 500 index has gained 3.8%.