Friday, 27 March 2009

Southwest have it all Rapped up

Only this week, the Financial Times reported that the airline industry is in dire straits. With the recession fully taking hold, fewer people are flying and fewer still are paying premiums for business and first class tickets. Since these are the major money spinners for airlines, profits in the industry are nosediving sharply.

With this in mind, it is no wonder that US budget carrier Southwest Airlines is bigging up a member of staff who – to save putting himself to sleep having made the mind-numbingly boring safety announcement for the fifth time that day – decided to liven it all up Will Smith style to the delight of a passengers who posted the video on YouTube.

The blogs and papers reported that it was an instant hit, with hundreds of thousands of viewers in just a few days, though a bit of savvy sleuthing by Abchurch found that actually a video of the rapping attendant first surfaced months ago. Either way, in these times, PR like this is priceless, and that a video from one girl’s cell phone in the US can end up in the UK’s Daily Telegraph really illustrates the power of viral marketing. The bonus for Southwest is that this is completely genuine and transparent, embracing the founding principals of social media. This is in huge contrast to companies who have to pay an agency to create videos that are intended to go viral. Not genuine, not transparent.

But while hunting for the video of this I actually found two versions; one filmed by a passenger (linked above), and another filmed from right next to the man himself. If you play a ‘spot the difference’ game, you will notice that:

1. the second video was shot on a camera that was of significantly higher quality than a phone.
2. there were fewer crazy passengers screaming “Yee Ha!”
3. David Holmes no longer has a sheet of paper with the words on it
4. the passengers are different

This, of course, made me think that Southwest cottoned on to the popularity of the video and decided to film David rapping for their own PR efforts, although it doesn't seem to be on their official YouTube channel NutsAboutSouthwest. Official or not, does this change how genuine the video is? I don’t think so. Now there are lots of passenger videos of him rapping, on flights headed all over America. I think that Southwest are making the most of a brilliant opportunity that has come their way. And as the guy mentions at the beginning of his spiel, many of the stewards on Southwest have ‘talents’ which include singing or dancing. I think if Southwest are open to letting their staff and passengers have fun on a flight, and they benefit from it so positively, then there is no reason they should not make the most of it – just as long as they don’t go after all their other staff and start filming them doing crazy tricks too often.

These are – ahem – turbulent times indeed for the airline industry, but it looks like, for a while at least, this great viral video will help keep Southwest flying high.


Thursday, 19 March 2009

Looking at liquidity on AIM

This week I attended an event organised by Vitesse Media's Growth Company Investor and BDO Stoy Hayward about “Liquidity on AIM”. The task was to find AIM’s most robust stocks with a market cap over £10 million. Vitesse Media and BDO assessed the trading statistics of every single AIM company, a total of 1550, over a six month period. They whittled down the list to just 106 companies with a market cap of over £10 million, and that had at least 50% of its shares traded in the six months. For these select companies, sales levels, profit levels, growth rates, and levels of corporate governance were all scrutinised, as well as brokers, advisors and market makers.

The findings note that there is a strong correlation with trading volume and the number of market makers supporting a company. A greater commitment by directors to engage with analysts and brokers can be well worth the time involved. There was a lot of emphasis put on corporate governance, since on average there ware more non-executive directors and separate Chairman and CEO roles in the most liquid companies. Happily, the most significant factor in liquid stock is NEWSFLOW. I quote: “Companies, especially smaller companies with little following, will see their shares trade and re-price only when something happens. By contrast, those that actively disseminate news and results should see trading volumes improve.” BDO continues to say although this takes quite a bit of management time, persistence does pay off.


Monday, 9 March 2009

GCI’s Spotlight on AIM

Heather and Bozzy attended the Growth Company Investor Spotlight on AIM breakfast last week. The annual survey of London’s junior market produced some characteristically enlightening statistics:

Companies valued below £20m: 71% (2007: 53%)
New Aim issues: 70 (2007: 222, 2005: 438)
Fund raising for admissions: £903m (2007: £6.25bn)
Delistings: 228 (2007: 224)
Total number of AIM companies: 1,550 (at year end 08)
Total market cap of AIM companies fell by 61% to £37.7bn (2007: £98bn)
Best share price performers
1. Avisen (formerly Z Group)
2. Tepnel Life Sciences
3. Ramco Energy
4. Futuragene

Sector wise there has been great change. The oil and gas, mining and real estate sectors have fallen in value particularly whilst general financial pips all three to be the most populous and high value sector on AIM.

Friday, 6 March 2009

Word of the week

£650,000 a year?? This is the figure that has stoked the fury of the headlines over the past week as it emerged that Fred ‘the Shred’ Goodwin would take his leave with an exorbitant pension despite notching up a £24bn loss as former Chief Executive of RBS. It was made worse by the realisation that as a part nationalised bank we, each of us, would be paying for it. On my calculation, taking the UK population as around 65million, every penny that Goodwin ‘earns’ as a retired man will be paid for by 10 of us. However, the debate over whether Goodwin will surrender this pension package still seems like a side issue to the real mistake. The government, Lord Myners as City minister in particular, have yet again been caught between two bases.

1. We knew about this and did nothing.
2. We didn’t know about this and we should have.

If all the indignation against Sir Fred was aimed at the government then there would soon be the change that is necessary to change the wider crisis. However Brown’s faulty triple regulatory structure of the Treasury, the Bank of England and the FSA seems yet again to be doing him the service of bouncing blame around until it loses its punch and drifts down on no one.