Indian Stock Exchanges have decided to freeze the buying and selling of Jet Airways shares from June 28th, as the airline struggles to find a way to bring itself back to life.

What happened?

As reported by Mint.com, Indian stock markets decided to take action on the trading of Jet Airways shares yesterday, in a move dubbed "art of preventive surveillance measures to curb excessive volatility".

What this means is that the shares were fluctuating so wildly (with some reports indicating that the shares dropped over 23%) that the stock market officials are stepping in to prevent the entire company from becoming worthless. Additionally, they are worried that with so many rumors abound in the market, Jet Airways will become an incredibly speculative stock and will drive the market in an unpredictable direction.

Apparently, the stock exchanges have been hearing rumors non-stop about the airline and have not had a clear answer on the future of the company.

"According to the circular, exchanges have been seeking clarification from the company in the recent past with respect to various rumours floating in the market. However, the company has failed to provide prompt responses and the responses received are not clear and satisfactory."  - Indian Economic Times.

Jet Airways 737
Many of Jet's aircraft, including the 737s, were repossessed by lessors and leased out to other airlines. Photo: Jet Airways

Why are the shares being frozen?

The exchanges have not even seen the most recent yearly financials of the company, which are normally posted just after March 2019.

“There are concerns with regard to continuity of flow of information about the company which is very vital for the appropriate price discovery in the scrip. Hence, trading in the scrip may not reflect the actual status of the company,” - NSE Statement to the Indian Economic Times.

In general financial rules, a company's value must be made clear to the market in order for its shares to be traded. If a company makes a loss, it must be announced publicly, otherwise it is a breach of trust of the marketplace.

The joint stock exchanges of India are allowing Jet Airways time to make their financial position clear (either they have money to continue operating or they are insolvent) or they will freeze trading shares by the 28th of June.

Jet Airways Cabin Crew
Many Jet Airways cabin crew lost their jobs and have since found employment elsewhere. Photo: Jet Airways

What does this mean for Jet Airways?

Naturally, you might be wondering why Jet Airways doesn't release its financial figures. Using logic, we can only assume that their financial standing is so dire that if they did make an announcement their stock price would fall to zero. That would make the company insolvent and thus unable to be salvaged with additional investment.

Jet Airways now has a real axe hanging over their head, with only 14 days to put together a better financial position. If they fail to do so, they risk their shares being frozen and losing the ability to generate investment from the stock market.

Otherwise, the Jet Airways dream might be lost forever.

What do you think? Can Jet Airways be saved? Let us know in the comments.