Boston Omaha (BOC) shares have had a bit of a recovery from the angst-ridden lows caused by the departure of their Co-CEO a few weeks ago… partly because a couple insiders have stepped up to do a little insider buying, with a decent first quarter also in the books, and probably partly because we haven’t seen any other bad news, and the anger over Alex Rozek’s generous buyout has started to fade.
They also sold some of their Sky Harbour (SKYH) shares at $10 per share, which helped to tank that stock… though Sky Harbour has reported relatively good news lately, it seems to me, with good occupancy at their first few locations and a steady drumbeat of expansion, including new ground leases at Dulles (DC suburbs) and Stewart (suburban NY, fancy Hudson Valley area). That private aviation real estate business is going to be fairly slow to grow, not unlike BOC’s core businesses, but it is on a good track, and they’ve proven out the viability of their business model with good returns on their first properties that have “matured” and reached full occupancy (they sell home-base hangar space and services to private jet owners). The sale of SKYH shares was only a couple percent of BOC’s massive holdings in that company, for a total of about $2.5 million, so it is not huge… but with that, and the award of SKYH shares to ex-CEO Rozek on his departure, BOC’s SKYH stake is down by about 700,000 shares, a reduction of 5-6% (they used partly SKYH shares and partly cash to buy out Rozek and his investors, and also bonused Rozek with some SKYH shares — BOC still owns 12.4 million shares and about 7 million warrants, with a current market value of about $130 million, though they account for it using the equity method, not as an investment, so that asset value is both not on BOC’s books and, since SKYH is not yet profitable, is also not contributing to earnings or cash flow).
No real news, but my perception is that SKYH is still building something that could become impressive, the first nationally standardized high-touch private hangar solution for private aviation, and investors might not appreciate just how valuable those airport land positions can become over time… and it looks to me as though the ship is steadying a bit at ...