AAMRQ stock

damajagua

Veteran
Jul 17, 2009
622
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What is going with AA stock? It's close to $7 a share.
This is incredible for a company in bankruptcy. Can anyone shed some light on this?
 
AA's plan of reorganization proposes to fully pay all unsecured claims, so it's theoretically possible for the existing stockholders to get more than just the 3.5% they were allocated in the plan. If a company fully pays its unsecured claims, excess value belongs, as always, to the existing stockholders. Stockholders get paid last, and are thus the first to lose in a typical bankruptcy, but if everyone else gets paid, the stockholders end up winning. Upside always belongs to equity holders. As LCC stock climbs in value, traders of AAMRQ see more and more upside.

It's unprecedented that a legacy airline bankruptcy results in full payment of unsecured claims. Typically, in the other airline bankruptcies, creditors were paid pennies on the dollar (some of the Ch 11 cases actually paid dimes on the dollar) with new stock. With new AA, claims will be paid at 100% with new stock.
 
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Most airline stocks are up lately.

http://www.tickerspy.com/index/Airline-Stocks
 
No other US airline has entered BK w/ $5B in cash, borrowed or not.

US market indices are at record levels... given that the US airline industry is profitable on average, airlines should share in the success of the general market.

http://www.marketwatch.com/investing/index/DJIA
 
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Hey, is it just me?------ But how does a company with, how much in the bank? 3$$$ billion? 4? And now, with it's stock on the rise, at what, $7.00 a share? -------- Now explan to me! How can that same Company legally be in B/K??? ------ Is it just me?? Or is something wrong with this picture???
 
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Hey, is it just me?------ But how does a company with, how much in the bank? 3$$$ billion? 4? And now, with it's stock on the rise, at what, $7.00 a share? -------- Now explan to me! How can that same Company legally be in B/K??? ------ Is it just me?? Or is something wrong with this picture???

When a company files for bankruptcy equity holders are almost always taken to the cleaners and their shares become worthless. As for their balance in the bank, that isn't directly correlated to the stock price per se. An efficient capital market should have asset prices that reflect the fundamentals and publicly available information but that isn't necessarily the case.

This article may be a useful read: http://www.businessweek.com/magazine/content/11_22/b4230047133608.htm

Josh
 
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When a company files for bankruptcy equity holders are almost always taken to the cleaners and their shares become worthless. As for their balance in the bank, that isn't directly correlated to the stock price per se. An efficient capital market should have asset prices that reflect the fundamentals and publicly available information but that isn't necessarily the case.

This article may be a useful read: http://www.businessw...30047133608.htm

Josh
Isn't that the point of this thread? In this case, the equity holders shares are "not" worthless! In fact, they are appreciating!------ Doesn't sound like a B/K company to me!
 
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Because they owed more than they had in the bank.

This statement reflects what is so sad about you.
I believe in your heart you feel you are a good union man because you follow and support what higher ups in the Union feed you. The problem is you assume that they are good Union men when they are sell outs.

So they owed more than they had in the bank. Who doesn't? Are you saying that when I borrowed $100,000 to buy my home and only had $2000 in the bank I should have been allowed to declare bankruptcy, keep whatever I wanted -even 500 new cars in the driveway, not pay anybody what I agreed to even if I was bringing in per year as much as I owed? Corporations are immortal, they do not retire, they either are producing or they no longer exist. Cash flow is critical, not debt, as long as the cash flow is sufficient Debt is not really a problem, the banks like it that way. Through debts Corporations simply pump their profits right to the bank.

AA brought in $25 billion last year. They had $5 billion in cash, yes it was borrowed cash but thats how banks make their money. Most corporations operate off borrowed money because thats how banks are able to skim off the profits, if they banks didn't do that then corporations would face more pressure from workers, both union and non-union. In labor intensive companies they will always operate with thin margins and siphon off the money to corporations that are not vulnerable to labor, its been that ways for over 100 years. Thats why they don't complain about paying $2 million fees to refinance a loan, or $500 for something that costs $5 to make or $4500 landing fees, or $4/gallon for Kerosene or $20 million bonuses for executives.

I would encourage you to watch the Mike Quill Senator Hartley debate on youtube. It was filmed in 1961. Companies have always claimed poverty as an excuse to try and screw workers, once we had leaders who would challenge them, now we have the likes of you and those you support. Hartley made the claim that Unions ask for increases the company cant afford (while they are siphoning off funds elsewhere) and Quill brought up how after they struck a company that claimed they didn't have any money for increases they all of a sudden found all the money they needed. Maybe the banks, the vendors, the airports and executives have to lower their expectations for a change. Nothing is set in stone if your leaders choose to believe the company then you need new leaders.
 
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Its a scam being lead by Judge Lane. They all should be in Prison.
Hey! I got it!!! -------- Maybe they should ask for a Government bailout!!!!------ I'm sure Obama and Co. would be more than happy to accommodate them!!! After all, that seems to be the answeer to everything these days! Let the Government fix it!!! ------- Well hange on to your shorts! They just might try to!----- If you let them!!!------- God help us!!!