What Does Julian Robertson Know About US Airways?

By now, you all are probably aware that Julian Robertson will shut down his Tiger Management group of funds Friday. However, what is a bit unclear is what will happen to the 16.5 million shares of US Airways (U) stock that Tiger owns.

Wednesday night, when news of the impending shutdown began to circulate, there was sentiment in some quarters that this would produce downward pressure on the shares of US Airways on Thursday -- the assumption being that at that point, Tiger would be forced to dispose of the shares fairly quickly.

However, we didn't share that line of reasoning. What we wondered was which airline would now possibly step up and buy the shares. At $25 and change, the stock is about as cheap as you could ask for. As a result, in one fell swoop, someone could have conceivably picked up 22% of the airline for a mere $412.5 million. For that matter, given what we knew last Wednesday, we easily could have envisioned a bidding war breaking out over the shares.

However, we note that in Robertson's official statement issued Thursday, Robertson said he is going to hold onto his shares of US Airways. As a result, we have to assume that Robertson considers the potential for a considerable run-up in the price of the shares in the near term to be too great -- vs. the bargain basement price they now command.

This is intriguing.

Does Robertson see the shares moving up based on the strength of underlying fundamentals -- the hallmark of his value-investing strategy? If he does, then we are missing something here.

Or perhaps the man has not learned his lesson and is still listening to US Airways Chairman Stephen Wolf, who just last week assured all of us that the airline was now in "superb" operational condition.

Or, is Robertson merely taking the position that all things that go down must come up again, and that US Airways has been unfairly sold off -- as has the entire sector of late?

Or, as we did, does he now think he controls a very strategic block of stock that would be seriously "in play" in terms of any merger or takeover attempt of the airline?

Whichever, it is clear that Robertson must feel he has some good reason(s) to hang onto stock that, for the last year and a half, has so deeply punished Tiger's returns.

We would just love to know what it is, Julian. You can just click on this link here and drop us an email when you have a chance.

Just call us nosy. Aafter all, it was about this time last year that Tiger predicted US Airways would have the potential to hit $160 a share.

Meanwhile, in a rather abbreviated statement issued by US Airways on Thursday, the airline said "Julian Robertson is a valued and respected shareholder and the company looks forward to continuing our relationship with him.''

So, this, too, would seem to indicate he does not intend to jump ship anytime soon.

Interesting. Wouldn't you have loved to have been a fly on the wall when Julian called Stephen and chatted about life this week?

Meanwhile, on the US Airways side, sources close to the airline tell us that Wolf continues to mull over several different exit strategies for the airline. While it appeared that relations between AMR (AMR) unit American Airlines and US Airways had cooled considerably after their planned deal fell apart last spring, we hear that this possible link-up is now back in the "active discussion" category. Then again, we also have heard from more than one source over the last month or two that Wolf also has had discussions with the folks from his old environs -- the United Airlines unit of UAL (UAL).

Makes sense. Either airline, because of existing route systems, could give Wolf the necessary transcontinental feed his US Airways' East Coast network (a system aligned almost entirely north-south) desperately needs.

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