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Spirit Airlines cant seem to reach its cruising altitude. The budget airline issued a warning late Monday that if it doesnt find an infusion of cash, its business is poised to fail. Spirit expressed the dire state of its financials in its quarterly earnings report that was filed late Monday. The report comes less than six months after the beleaguered airline emerged from bankruptcy with a plan to right its business and pursue profitability. Management has concluded there is substantial doubt as to the Companys ability to continue as a going concern within 12 months from the date these financial statements are issued, Spirit wrote in the filing, citing a scenario in which the company fails to hold the liquid assets needed to meet its debt obligations and keep its credit card processor. To steer itself out of the crisis, Spirit is pursuing liquidity enhancing measures that could include selling some of its aircraft or real estate and offloading some of its extra airport gate capacity. While it is the Companys goal to execute on these initiatives, there can be no assurance that such initiatives will be successful, the company wrote. Spirit cut 200 jobs back in January as part of its plan to slash $80 million in costs. Last year, the company sold 23 Airbus planesmore than 10% of its fleetto drum up emergency cash. As you all know, were facing significant challenges with our business, which is why weve been focused on taking actions to optimize our organization and create more efficiencies, then-Spirit CEO Ted Christie told staff in an internal memo earlier this year. The bottom line is, we need to run a smaller airline and get back on better financial footing. Recent problems, Frontier bailout Spirit filed for Chapter 11 bankruptcy late last year in light of mounting losses, a pile of debt, and failed merger negotiations. The airline continued to operate during that time frame, which coincided with the busy holiday travel season. The most important thing to know is that you can continue to book and fly now and in the future, the company wrote in an open letter to customers at the time. Spirit was in talks with JetBlue to combine the two airlines back in 2023, but the ill-fated merger faced stiff opposition. The Justice Department sued to block the $3.8 billion deal over antitrust concerns and, ultimately, a federal judge sided with the government, sounding the mergers death knell. Earlier this year, Spirit rejected a different merger offer from fellow budget carrier Frontier Airlines. Frontier revised the offer, but Spirit declined to move forward with the deal, which would have been worth around $2.16 billion. At the time, the company insisted that going it alone and pursuing its post-bankruptcy restructuring plan would benefit shareholders more than doubling up with another airline. The airline industry is in a strange transitional phase in 2025. Normal U.S. carriers are looking to rebrand themselves as lifestyle airlines while credit card companies double down on luxe travel perks designed to make air travel more bearable. The industrys already wafer-thin margins are threatened by Trumps endless parade of tariffs and the economic chaos they sow. Meanwhile, a spate of U.S. aviation disasters has led to tanking trust in air travel and calls for a national overhaul of the air traffic control system that undergirds the whole industry. Howand ifbudget airlines fit into the future of travel is an open question, but its one Spirit needs to answer if it plans to survive. Unfortunately for the troubled airline, time is running out.
Category:
E-Commerce
Financial companies from Bank of America to Fiserv are preparing to launch their own dollar-backed crypto tokens now that a new U.S. law has established the first-ever rules for stablecoins, but experts warn the path forward could be anything but simple. U.S. President Donald Trump on July 18 signed the GENIUS Act into law, setting federal rules and guidelines for cryptocurrency tokens pegged to the U.S. dollar known as stablecoins. This U.S. law, the first designed to facilitate crypto usage, could pave the way for the digital assets to become an everyday way to make payments and move money, experts said. The use of stablecoins, designed to maintain a constant value, usually a 1:1 U.S. dollar peg, has exploded in recent years, notably among crypto traders moving funds to and from other tokens, such as bitcoin and ether. Now, a slate of companies are entertaining their own stablecoin strategies to capitalize on the promise of instant payments and settlement that stablecoins offer. Payments on traditional banking rails can take several days to arrive, or take even longer across international borders. Among the companies considering stablecoins are Walmart and Amazon, the Wall Street Journal reported in June. Walmart and Amazon did not immediately respond to requests for comment. However, the new law will not immediately open the floodgates, experts said. The newfound opportunity to dabble in stablecoins can lead to numerous tricky considerations for firms, both strategic and technical. Companies have to embark on a lengthy process to deploy their own stablecoins, or decide whether it makes more sense to integrate existing stablecoins, like issuer Circle’s USDC, into their business. Companies first have to decide the purpose of their stablecoins. For example, a retail platform could make a stablecoin available to customers to buy goods, which could appeal to crypto-savvy users. Some companies could use them internally for cross-border payments, given that stablecoins can enable near-instant payments, often with lower fees. How a company plans to use a stablecoin could affect whether it creates a stablecoin or works with a partner. “The intended use is going to matter a lot,” said Stephen Aschettino, a partner at Steptoe. “Is this something really designed to drive customers to engage with the issuer, or is the issuer’s primary motivation to have a stablecoin that is more ubiquitous?” For nonbanks, stablecoins will bring new compliance costs and oversight requirements, given that the GENIUS Act requires issuers to comply with anti-money laundering and “know your customer” (KYC) requirements. “Those that already have robust KYC risk management and regulatory change management programs or working towards implementing these program elements may have a competitive advantage,” said Jill DeWitt, senior director of compliance and third-party risk management solutions at Moody’s. One group likely to enjoy that advantage is banks, which are no strangers to screening for sanctions-related risks and verifying the identities of their customers. Bank of America and Citigroup are actively considering issuing their own stablecoins, the CEOs of both banks said in earnings calls last month. Others like Morgan Stanley are closely monitoring stablecoin developments. JPMorgan Chase CEO Jamie Dimon said the bank will be involved in stablecoins, without giving details. Banks need to weigh several factors before going live with stablecoins, including how holding the tokens might affect liquidity requirements, said Julia Demidova, head of digital currencies product and strategy at FIS. Banks holding assets like stablecoins on their balance sheets might be required to hold more capital under current U.S. bank rules. “The GENIUS Act is great, but if the bank is treating their stablecoin on the balance sheet under prudential banking regulation, you still need to look at the risk weight of the asset,” she said. Another crucial question is how to issue stablecoins. Like other cryptocurrencies, stablecoins are created on a blockchain, a digital ledger that records transactions. Hundreds of blockchain networks exist today, two of the most popular being ethereum and solana. Both are considered public or “permissionless” blockchains because all transactions on those networks are available for anyone to see. Still, it is unclear which attribute companies issuing stablecoins would prioritize. Banks, in particular, could opt for their own private, or “permissioned,” blockchains instead, Demidova said. “The banks would desire and demand that very clear governance and structure,” she said. “In that permissionless environment, you don’t have the governance and controls in place.” Others like said Nassim Eddequiouaq, CEO of Bastion, a provider of infrastructure for companies to issue their own stablecoins, see merits to permissionless blockchains. “We’ve seen a tremendous amount of interest for existing blockchains that have seen user adoption, that have been battle tested at scale, including during activity spikes,” he said. Although the GENIUS Act has been signed into law, its effective date is potentially several years off, with federal banking regulators expected to issue rules in the meantime to fill in certain gaps. The Office of the Comptroller of the Currency, for instance, is expected to issue rules to outline several risk management and compliance requirements. Under the new U.S. framework, the Treasury Department will have to issue a rule on foreign stablecoin regulatory regimes and their compatibility with the new U.S. framework. “These things are going to have to phase in,” said Aschettino. Hannah Lang, Reuters
Category:
E-Commerce
Stablecoin issuer Circle Internet Group is seeing its stock (NYSE: CRCL) rise yet again. Shares in the company are up more than 7% in early morning as of the time of this writing. At one point, shares were up as much as 10% after markets opened. The reason? Circle just posted its first quarterly earnings as a public company, and investors seem to like what they are seeing. Heres what you need to know. Circle posts its first quarterly results as a public company Today, Circle announced its Q2 2025 financial resultsthe first quarterly results the company has posted as a publicly traded business. The big number most investors seem to care about from Circles Q2 earnings is its revenue. The company said that for the quarter, its total revenue grew to $658 million. Thats a 53% increase year over year. It also said that the circulation of its stablecoin, USDC, grew 90% year over year to reach a total of $61.3 billion at the quarters end. The more the circulation of Circles USDC stablecoin grows, the more Circle stands to make. Thats because Circle makes the majority of its revenues not from cryptocurrencies themselves, but from U.S. Treasuries. Circle, much like a bank, knows that only a fraction of all the USDC in circulation will be redeemed at any one time, so it only needs to keep a portion of reserves in cash to be instantaneously redeemable by USDC holders, Mitrade points out. It invests the rest in short-term U.S. Treasuries. This means that as the circulation of USDC grows, Circle stands to make more income from its investments in short-term U.S. Treasuries, thereby increasing its revenue. Yet despite the 53% revenue growth Circle announced, the company still posted a net loss of $482 million. That net loss was mainly attributed to IPO-related noncash charges, including stock-based compensation payouts. CRCL stock surged after its June IPO Despite charges related to its IPO significantly contributing to the companys Q2 net loss, Circles public offering has been very good to investors. Since Circle went public in June, its stock surged. By the end of June, CRCL stock had risen 750%. Circle, like many crypto companies, has been greatly helped by a more friendly crypto regulatory environment under the Trump Administration. Those policies are why more cryptocurrency companies seem more interested in pursuing IPOs, including trading platform eToro, which did so in May, and cryptocurrency exchange Bullish, which is having its IPO tomorrow. Over the past month, however, CRCL stock has lost about 7.65% of its value. As of the time of this writing, with todays post-earnings boost, CRCL shares are hovering around $168.16. When the company went public in June, its IPO share price was $31 per share.
Category:
E-Commerce
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