Things went from bad to worse at Wheels Up yesterday, even as interim CEO Todd Smith was assuring investors and the media that the company was positioned for a rebound. After the stock shed an additional 21 percent on the day, financial network CNBC reported that the company is consulting with bankruptcy advisers. CNBC also reported that Warren Buffett, whose Berkshire Hathaway owns NetJets, said he thought “there’s a good chance” that Wheels Up customers who prepaid for block hours “are going to be disappointed later on.”
Even as Wheels Up announced a first-quarter loss of $101 million, Wall Street eyebrows were further raised by the exit package crafted for outgoing CEO and founder Kenny Dichter. According to a Form 8-K filed with the U.S. Securities and Exchange Commission, Dichter will receive his $80,000 monthly base salary for the next two years and an immediate lump-sum payment of $3 million. He will also receive any additional bonus for 2023 on a pro-rata basis and 100 jet flight hours in Wheels Up aircraft and will remain on the company’s health plan.
On Monday, several law firms announced the launch of a class-action securities fraud suit on behalf of shareholders against Wheels Up based on its restatement of 2022 financial results last month due to material weaknesses in its internal control over financial reporting.
</tr>
>
But your right. Nothing to see here. Warren Buffet thinks so.
