What Happened?
Shares of aircraft leasing company FTAI Aviation (NASDAQ:FTAI) jumped 8.8% in the morning session after the company launched FTAI Power, a venture repurposing its CFM56 aircraft engines into 25-megawatt power turbines.
Aiming to produce over 100 units annually starting in 2026, the initiative transforms existing inventory into immediate energy solutions. Investors reacted positively to this new revenue stream, which would use FTAI's maintenance expertise to meet the global surge in electricity demand.
As COO David Moreno noted, this strategy turns aviation technology into a cornerstone of the AI economy's power grid. Artificial Intelligence requires unparalleled amounts of power that traditional grids often cannot provide quickly enough. By offering flexible, "plug-and-play" turbines, FTAI provides AI hyperscalers with the rapid-deployment energy necessary to fuel massive data centers.
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What Is The Market Telling Us
FTAI Aviation’s shares are extremely volatile and have had 49 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 11 months ago when the stock dropped 28.3% on the news that the company released additional information following Muddy Waters's short report (published the previous week).
FTAI said in an SEC filing that it "strongly disagrees with the assertions made in the Short-Seller Report. However, in view of the timing of the Short-Seller Report relative to the preparation of the Company's audited financial statements for fiscal year 2024, and the potential time required for any review of this nature, the Company cannot rule out the possibility that the filing of Company's Annual Report on Form 10-K for fiscal year 2024 (the "Annual Report") may be delayed." This was not the response that investors and the market were hoping for.
A delayed filing raises concerns that there could be some credence in Muddy Waters's claims that FTAI has engaged in misleading accounting practices to make its businesses look better. Specifically, Muddy Waters claims that the company is overstating the portion of its business that comes from MRO (maintenance, repair, overhaul), which is steady and high margin.
FTAI Aviation is up 32.4% since the beginning of the year, and at $191.34 per share, has set a new 52-week high. Investors who bought $1,000 worth of FTAI Aviation’s shares 5 years ago would now be looking at an investment worth $8,376.
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