When is the stock....?

[eolesen]

Today was not the day to sell, unless you were in dire need of money.

... or the village idiot.

Hell, even Jetnet was all but warning people not to rush to sell:

REVISED 03/10/2006

The final one-third of the options in the Broad Based Stock Plan will vest on April 17, 2006. U.S.-based American Airlines employees can choose to exercise vested options at any point beginning April 17, 2004 up to the time markets close on April 16, 2013. To decide when to exercise options, participants should consider the factors that influence stock market performance.

STOCK MARKET FACTORS TO CONSIDER
AMR Stock Performance - The amount a participant could realize upon exercising options ultimately depends on the amount that the price of AMR stock exceeds the $5.00 strike price. While it is impossible to predict the future, the decision of when to exercise options should take into account what the participant thinks the stock is likely to do in the future.


Timing of Exercise - While the final one-third of the options will vest on April 17, 2006, participants have up to nine years - until April 16, 2013 - to exercise all options granted in 2003. If by immediately exercising options as they vest, the participant may realize a gain, but gives up the potential for possible future gains. Conversely, by waiting to exercise, the participant risks that the price of AMR stock will decrease in the future and forfeit current gains.


Supply and Demand - The price of any stock depends on supply and demand. When there are more sellers than buyers, the price generally goes down. When there are more buyers than sellers, the price generally goes up. This action occurs on the stock market every business day through the normal course of buying and selling any stock available on the stock market. Historically, approximately five to six million AMR shares have been traded each day on the New York Stock Exchange, sending the price of AMR stock up or down, depending on supply and demand. On April 17, 2006 stock options on approximately 12 million new AMR shares will vest and become exercisable. If large numbers of participants were to immediately exercise their options and sell their shares, the huge increase in supply of AMR shares to the stock market could cause the stock price to fall, since there are many more sellers than buyers.


Airline Stocks are Cyclical - Historically, airlines have been considered cyclical stocks, which means the industry's share prices tend to increase in good economic times and decrease when the economy is weak. At times these fluctuations have been quite dramatic.


External Factors and Risks - In addition to cyclical factors, airline stock prices are also subject to several external factors and risks. These include fuel prices, changes in competition, international events, terrorist attacks and other events.


PERSONAL FACTORS TO CONSIDER
Current Financial Needs - Options should be treated as an investment. As with all investments, each participant will have to decide if he or she has a better use for the funds. While exercising options eliminates the potential for future gains, some participants may have more immediate needs that can be met with the proceeds from exercising options.


Risk Tolerance - The value of options is not guaranteed. Like all stock-based investments, the options could be worth more in the future, or their value could decline (in some cases to "zero"). Each participant will need to decide if he or she is comfortable with the risks versus the reward tradeoff.


Financial Diversification - Stock options are one of several pieces - including salary, pension and possibly AMR shares in a 401(k) - of each participant's overall finances that are tied to a single company. While many participants also have investment or savings accounts outside of AMR, in general, being financially diversified - e.g. not having "all of your eggs in one basket" - is good advice to follow.


Taxes - With employee options, no taxes are due until the options are exercised. However, exercising the options creates a taxable event. Participants should consult a tax advisor for specific tax advice.


Employment Status - Other than retirement and certain other circumstances, options granted under this program are cancelled when leaving the company. More information on this subject is included on Jetnet.


Ultimately, each participant will need to decide when it is best to exercise the options granted last year. The company cannot make any recommendation or give any advice on this subject.

 

[NewHampshire Black Bears]

Former moderaator,

"E",
Thanks for the info.

I was selling today(the final 1/3) no matter what.

I "thought" Mellon HELD it, but due to your astute Info., now I'm not so pissed

NH/BB's

 

[FWAAA]

AMR reports relatively small loss, and the stock skyrockets this morning. Over $25/sh right now, and $40 by mid-year is still a very real possibility.

Congrats to all who resisted selling into a declining market Monday morning.

 

[AMFAMAN]

AMR reports relatively small loss, and the stock skyrockets this morning. Over $25/sh right now, and $40 by mid-year is still a very real possibility.

Congrats to all who resisted selling into a declining market Monday morning.

Stock down to 22.05...Congrats to those who dumped it..