Alaska Air Group, Inc.
Thesis
Alaska Airlines is positioned to become the dominant player on the West Coast due to its low-cost structure and potential for capacity expansion at key airports like LAX and SFO. The company has opportunities to swap gates and focus on California, which is more valuable for its operations than expanding to the East Coast. The risk/reward is skewed in favor of a long position as Alaska could significantly increase its market share and profitability.
Did it work?
The long thesis rested on Alaska gaining West Coast market share and expanding profitability, but the stock declined 51.3% over the ~9.3 years since the pitch — a decisive loss of capital that directly contradicts the bullish risk/reward claim. With well over any reasonable implied horizon elapsed and the price moving sharply against the long direction, the thesis has clearly not played out. Whatever operational logic existed (gate swaps, California focus) did not translate into shareholder returns.