Global Business Travel offers investors an attractive play on the ongoing resurgence of business travel. The No. 1 company in a fragmented market has a tenacious blue-chip customer base and an attractive business model that should drive more travel.
AmEx GBT, officially known as
Global Business Travel Group
(ticker: GBTG), began public trading on May 31 on the New York Stock Exchange following a merger with
Apollo Strategic Growth Capital
special purpose acquisition company, or SPAC, sponsored by
Apollo Global Management
(APO). The stock is currently trading at around $7.50, below the SPAC offering price of $10.
American Express (AXP) owns 35% of the company, and
(EXPE), 16%. In 2014, AmEx sold half of that amount to a group led by Certares, a travel investment firm. AmEx GBT has the right to use the American Express name until 2033.
Business travel is slowly recovering from the pandemic, but the pace is accelerating. The company said its transaction volume – hotels, flights, etc. – reached 72% of 2019 levels in the last three weeks of April, compared to 46% in the first quarter. Prior to the pandemic, business travel was growing at 4% per year.
AmEx GBT has a market value of almost $3.3 billion based on 451 million shares in issue. But the public circulation is only four million shares, which leads to trading volatility. There are also approximately 39 million warrants (GBTG/WS) with a five-year maturity and an exercise price of $11.50 trading around $1.25.
|Market price (bill)||$3.5|
|Promotions outstanding (million)||451|
|Current share turnover (million)||4.1|
|2022E Revenue (bill)||$1.75|
|2022E EBITDA (million)||$80|
|2023E Revenue (bill)||$2.40|
|2023E EBITDA (million)||$527|
|Housekeepers||American Express, Expedia, Sertares|
E = estimate
Sources: company reports; Fact set