Gogo Inc (GOGO) Stock Falls 38% After Being Sued by American Airlines

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Shares of Gogo Inc (NASDAQ:GOGO) have tanked this morning after it has been announced that one of their main clients has decided to sue them. The airline will more than likely be switching internet service providers as well for their fleet of airliners. This spells bad news for Gogo as American Airlines says that they have found faster internet service from another company, ViaSat.

ViaSat provides internet to other airlines such as United Airlines, Jet blue, and Virgin America. This isn’t certainly the end for the relationship between Gogo Inc (NASDAQ:GOGO) and American Airlines though, as the company has the option of submitting a new proposal, which they plan on doing. It will related to their relatively new 2Ku satellite technology.

“We believe that 2Ku is the best performing technology in the market and look forward to discussing our offer with American,” Gogo explained.

The stock is down 38.82% or $5.39 following the news, hitting $8.5 per share. About 1.13M shares traded hands or 47.87% up from the average. GOGO has declined 29.56% since July 10, 2015 and is downtrending. It has underperformed the S&P500 by 19.36%.

The institutional sentiment increased to 1.07 in Q2 2015. It’s up 0.07, from 1 in 2015Q2. The ratio increased, as 20 funds sold all their Gogo Inc shares they owned while 41 reduced their positions. 22 funds bought stakes while 43 increased their total positions. Institutions now own 67.27 million shares which is 18.62% more than the previous share count of 56.71 million in 2015Q2.

Jericho Capital Asset Management L.P. holds 2.8% of its total portfolio in Gogo Inc, equating to 2.94 million shares. Elk Creek Partners Llc owns 2.01 million shares representing 2.49% of their total US portfolio. Moreover, Stelliam Investment Management Lp has 1.75% of their total portfolio invested in the company, equating to 4.62 million shares. The Texas-based Hodges Capital Management Inc. has a total of 1.08% of their portfolio invested in the stock. Valinor Management L.P., a New York-based fund reported 1.68 million shares owned.

Gogo Inc. is a holding company. The Company is an aero communications service provider. The company has a market cap of $749.50 million. The Firm operates through three divisions: Commercial Aviation North America , Commercial Aviation Rest of World (CA-ROW) and Business Aviation (BA). It currently has negative earnings.

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