““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
Eclipse auction fuels instant gratification
Already a symbol of a revolution in personal aircraft, Albuquerque-based very light jet maker Eclipse Aviation is setting out to change how people buy airplanes. Fulfilling a promise made seven years ago-long before the first Eclipse 500 rolled off the assembly line-the company recently put one of its early production aircraft on the Internet auction block, using technology from eBay.
The auction of serial number 000038 was open only to potential customers who had placed $5,000 refundable deposits. (Some of those deposits had been placed between 2000 and 2002 and had been accruing "Eclipse Dollars"-to be deducted from the amount of a winning bid-at the rate of 1,000 per month.)
While the initial offering price for the Eclipse 500 was $995,000, low serial numbers have been changing hands at upwards of $1.6 million. As such, bidders could not have been expecting a bargain. Bidding for number 000038 began at $1,633,945 (95 percent of the aircraft's current invoice price plus optional equipment).
Fourteen bids later, the VLJ sold for $1,833,945 to Morten Wagner, the 35-year-old Danish owner of a European online dating service. For that price, Wagner got an Eclipse 500 LX edition; his tuition in the manufacturer's Type Rating Pilot Training program; and the right to jump to the head of the line of position holders and receive immediate delivery of the aircraft.
For Wagner, who currently flies a Cirrus SR22, that last benefit was the most important factor spurring his bidding. "Waiting for three years? I would do it if I had to," he told BJT, "but if I can grab one now, I would much rather have it." Wagner said he would have bid as much as $1.9 million for the aircraft, which he plans to fly home in January, after he is trained and the Eclipse receives its European avionics upgrades.