Looking to the sky as an investment strategy

Flight spotters fueled rumors this week that Ahold Delhaize is on the way to a takeover in the US. Big investors have been looking to the sky to predict trades for some time. A good strategy?

On the computer screen, small airplane icons in different colors move across the map of Belgium. They track in real time which aircraft – commercial, private or military – are in the air. Each icon comes with a lot of information: what type it is, what the unique registration number (number plate) is, where it comes from. Looking up at the sky with binoculars or a camera is all time. But in digital times, flight spotting can be done from any computer screen or mobile phone.

And that can provide a lot of information. Investigative journalists have been tracking the planes of dictators for some time to uncover shady dealings. In January, the Bellingcat network created a tool to monitor air traffic over Kazakhstan to map the unrest there. The activities of celebrities, politicians and sports stars are followed through the movements of their private jets.

Tesla and SpaceX billionaire Elon Musk had to face this to his shame when teenager Jack Sweeney created the automated Twitter account @elonjet in mid-2020. Every flying motion of Musk’s Gulfstream G650ER is neatly signaled there. The account has nearly half a million followers.

Musk offered $5,000 to close the account “for his safety.” “I don’t like the idea of ​​being shot by an idiot.” In vain: Sweeney asked for $50,000 and no deal was reached. And then we still know how often Musk flies to California and that he cut short his vacation in Mykonos in July after just a few days.

business

Sweeney — who also tracks the private jets of billionaires Jeff Bezos and Bill Gates, as well as Russian President Vladimir Putin and some oligarchs — wants to monetize his algorithm in a different way. He will track flights on demand, in other words for a fee. Knowing who is flying where and when can provide valuable information. What an expensive football deal is coming. Or which companies are planning.

100,000

dollars

Specialized services cost a pretty penny. They charge up to $100,000 for a year.

The Washington Post tried to assess which city Amazon would choose for its new headquarters by tracking CEO Jeff Bezos’ flight movements. In April 2019, a stock advisor informed his clients that the Texan Occidental Petroleum jet had been spotted at the airport near Warren Buffett’s Berkshire Hathaway headquarters. Two days later, it was revealed that Buffett pumped $10 billion into the oil company.

In 2017, investors heard about an impending deal between pharmaceutical giant J&J and Actelion when J&J’s corporate jet sat on the tarmac near Actelion’s home base for days. On the day the deal was announced, Actelion’s stock jumped 20 percent, giving Elliott Management – founded by shareholder activist Paul Singer – $200 million.

hedge funds

Such stories have made flight data a business unto itself in the investment world. Specialist providers, such as Quandl and JetTrack, can count on tens of thousands of customers.

Quandl was acquired by Nasdaq in late 2018 to strengthen its offering of alternative financial data. It also stated that Quandl was used by “8 of the largest 10 hedge funds and 14 of the largest 15 banks.” JetTrack is offered through Bloomberg’s news service.



Great success stories like Occidental Petroleum and Actelion are rare. The information is highly speculative and circumstantial.

Both services cost a pretty penny: for a year they charge up to $100,000. Not for the small investor. And quite expensive because big success stories like Occidental Petroleum and Actelion are quite rare and the information is very speculative and indirect. Because no one knows for sure who is on board and what the destination of the person or persons on board is.

Helicopter

How far can you jump as a small investor? As can be seen on our screen, it is not difficult at all to find out what is happening in the sky. There are plenty of apps and websites that allow you to track flights all over the world. You just want to know whose device is on the way. It is not always possible to determine this from the registration number alone.

On my screen I can see from one helicopter that it belongs to a Dutchman who got rich in real estate. A few aircraft belong to flying clubs. However, many units do not have an owner listed. Many countries allow remaining anonymous for privacy reasons.

There is a loophole for US devices because official authorities respect anonymity at the request of the owners, but it is not required by law. Websites like adsbexchange.com – the page on our screen – work with antennas from hobbyists, and they don’t have to stick to it. This is also why Musk cannot enforce his anonymity.

Ghelamco

But it is not like that everywhere. If you want to know where the private planes from the company GBL or the entrepreneurs Filip Balcaen or Paul Gheysens fly to, you must first find out which plane they fly with. This can be done through detective work. The soccer player Radja Nainggolan was brought to Antwerp in 2021 with a private plane. The images show the registration number of the plane, operated by commercial aviation group Abelag, but bearing the letters ‘GHE’. From Gheysens’ Ghelamco?



On my screen I can see from one helicopter that it belongs to a Dutchman who got rich in real estate.

There are also special websites that link owners to units for a few hundred or thousand euros. But there are many gaps in those databases. It is often impossible to find out who the real owner is through construction with companies. Many units are also operated by companies such as Abelag. And many companies rent jets for their best guys. It is also a dead end.

If you do manage to connect an entity to a company or entrepreneur, it is often a matter of looking for a needle in a haystack. There is no news on many flights. Many analysts are therefore skeptical of the real value of all that plane spotting.

Wait and see if the flights between Ahold Delhaize’s headquarters and rival Albertsons in the US actually mean a takeover is imminent. In 2018, similar rumors about cigarette maker Altria turned out to be ‘out of the blue’. Then, based on flight movements, Altria was believed to be buying a Canadian cannabis player. A few months later, Altria did. Only it turned out to be a different company than you had previously ‘spotted’.

The essence

  • Flight movements between the US headquarters of Ahold Delhaize and Albertsons are fueling takeover rumors.
  • Big investors such as hedge funds pay up to $100,000 a year to predict deals via air travel.
  • But it’s like looking for a needle in a haystack, because information is often indirect and highly speculative.

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