Wheels Up investors extend share lock-up until 2025

ATLANTA - Wheels Up Experience Inc. (NYSE: UP), a prominent player in the on-demand private aviation sector, disclosed today that its lead investors have consented to prolong the lock-up period for their shares. The lock-up extension affects shares owned by notable stakeholders such as Delta Air Lines (NYSE:DAL), Inc., CK Wheels LLC, and Cox Investment Holdings, LLC, which will now remain restricted until September 20, 2025. This decision also includes an agreement from Kore Capital LLC and funds managed by Whitebox Advisors LLC to extend the lock-up on 72.5% of their shares for the same duration.

This extension signifies that nearly 97.2% of the shares under the Investment and Investor Rights Agreement are bound by this lock-up restriction until the specified date in 2025. Wheels Up CEO George Mattson expressed gratitude for the lead investors' confidence and support, noting that the extended lock-up aligns with the company's strategic plan execution.

Wheels Up operates a large and diverse fleet, offering a comprehensive suite of private aviation services, including charter and membership programs, as well as cargo, safety, security solutions, and managed services. The company maintains a strong commitment to safety and service, bolstered by its strategic partnership with Delta Air Lines.

In conjunction with this announcement, Wheels Up is also filing a Current Report on Form 8-K with the Securities and Exchange Commission (SEC) regarding the lock-up extension.

The company's recent press release also contained forward-looking statements, which are subject to various risks and uncertainties. These statements are based on current expectations and assumptions and are not guarantees of future performance. Wheels Up has cautioned not to place undue reliance on these forward-looking statements, which reflect the company's position only as of the date they were made.

This news is based on a press release statement from Wheels Up, providing investors and stakeholders with the latest update on shareholding agreements within the company.

In other recent news, Wheels Up has seen significant changes in its executive leadership and has reported stable revenue for the second quarter of 2024. The company's Chief Financial Officer, Todd Smith, and Chief Legal Officer Laura Heltebran are both set to leave the company. In their stead, Matthew Knopf will take on the role of Chief Legal Officer and Secretary, while Eric Cabezas will serve as the interim Chief Financial Officer.

In terms of financial performance, Wheels Up reported Q2 earnings amounting to $196 million, despite a GAAP net loss of $97 million. The company has managed to reduce its cash burn by 63% compared to Q1. Operational improvements are also evident, with a 99% completion rate, an 87% on-time performance, and a record 31 days of zero cancellations.

Furthermore, Wheels Up has seen a significant increase in block sales, over 25% sequentially and over 50% year-over-year. This is partly due to its strategic partnership with Delta Airlines, as they target high-net-worth individuals. As part of their future plans, Wheels Up aims to make private flying more accessible and flexible, with a focus on fleet modernization to enhance customer experience. The company expects further improvement in adjusted EBITDA in the upcoming quarters. These recent developments mark a concerted effort towards operational excellence and sustainable growth.

InvestingPro Insights

As Wheels Up Experience Inc. (NYSE: UP) secures investor confidence with a lock-up extension, a glance at the company's financial health through InvestingPro metrics reveals a mixed picture. The market capitalization stands at a moderate $1.65 billion, reflecting the size and scale of the business in the private aviation industry. Despite this, analysts are forecasting a sales growth in the current year, which could be indicative of the company's potential to scale operations and increase revenue.

On the flip side, Wheels Up is facing some financial headwinds. The company is operating with a negative P/E ratio of -2.69, and adjusted figures for the last twelve months as of Q2 2024 show a further decline to -4.19. This suggests that the company is not currently generating profits, a concern that is echoed by the InvestingPro Tip that analysts do not anticipate the company will be profitable this year. Additionally, Wheels Up's gross profit margins are weak at 1.27%, which may indicate challenges in maintaining profitability while managing costs.

Investors considering Wheels Up should note the company's significant return over the last week, with an 8.76% price total return, and even stronger over the last month and three months, with 18.0% and 39.64% returns respectively. This volatility is a double-edged sword, as it presents opportunities for gains but also risks, which is consistent with the InvestingPro Tip highlighting the stock's high price volatility. Those looking for more insights can find a comprehensive list of InvestingPro Tips on the platform, including additional tips beyond those mentioned here, to better inform their investment decisions.

To stay updated on Wheels Up's financial performance and for more InvestingPro Tips, interested parties can visit https://www.investing.com/pro/UP.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.