Anyone Know Why Ual Stock Is Going Nuts?
- Thread starter boeing787
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TravelDude
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EXCELLENT POST!!!boeing787 said:
I was wondering the exact same thing. It was up over 22% at one point today. Additionally, I was under the same understanding that UAL(AQ) stock would be canceled upon exit from bankruptcy.
ANYONE KNOW? IDEAS?
UnitedChicago
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The stock will be cancelled upon emergence. I wonder what's moving the stock. Could there be some news out there - ATSB loan news?
Although UAL will probably be canceled when it emerges from bankruptcy, there exists a slight chance that the common shareholders (who are, after all, LAST in line) might receive some sort of dividend (like perhaps a few shares of new UAL stock) when UAL emerges from CH 11. So on that chance, people with money to burn are bidding up UAL stock in hopes of a big payday.
Lots of people bet billions of dollars in Vegas hoping to win it big. People who did not buy AMR last year at $1.30 (currently at $15.79) are probably buying UAL hoping for a similar miracle.
My advice? Losing money in Vegas is more fun than losing money when UAL is canceled. B)
Lots of people bet billions of dollars in Vegas hoping to win it big. People who did not buy AMR last year at $1.30 (currently at $15.79) are probably buying UAL hoping for a similar miracle.
My advice? Losing money in Vegas is more fun than losing money when UAL is canceled. B)
If the stock is canceled, the investors get nothing. Nada. Zip. Well, you would get a loss that might be deductible against your other income (check with your tax advisor).pushpesh said:
It's as if the company pretends the old UAL stock never existed.
Happens all the time - like with K-Mart and USAir. Buyers of old K-Mart stock (canceled when it emerged) howled, but they got nothing.
Don't buy stock of bankrupt companies if you don't understand how bankruptcy works. B)
Don't know if it is the reason for the move but the short position is very very big (it will be worth 0 guaranteed, so who wouldn't short all they could borrow?) but if there is failure to deliver you could be bought in, and funny thing when you get bought in the broker isn't too concerned about the best price for you, the poor short...don't buy this, your chances of getting anything are close to 0, when the bankruptcy is resolved....
UnitedChicago
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what conference?
UnitedChicago
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thanks for posting.
should be interesting...
should be interesting...
ual747mech
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Here's the answer:TravelDude said:
What Will Happen to My Stock or Bond?
A company's securities may continue to trade even after the company has filed for bankruptcy under Chapter 11. In most instances, companies that file under Chapter 11 of the Bankruptcy Code are generally unable to meet the listing standards to continue to trade on Nasdaq or the New York Stock Exchange. However, even when a company is delisted from one of these major stock exchanges, their shares may continue to trade on either the OTCBB or the Pink Sheets. There is no federal law that prohibits trading of securities of companies in bankruptcy.
Note: Investors should be cautious when buying common stock of companies in Chapter 11 bankruptcy. It is extremely risky and is likely to lead to financial loss. Although a company may emerge from bankruptcy as a viable entity, generally, the creditors and the bondholders become the new owners of the shares. In most instances, the company's plan of reorganization will cancel the existing equity shares. This happens in bankruptcy cases because secured and unsecured creditors are paid from the company's assets before common stockholders. And in situations where shareholders do participate in the plan, their shares are usually subject to substantial dilution.
If the company does come out of bankruptcy, there may be two different types of common stock, with different ticker symbols, trading for the same company. One is the old common stock (the stock that was on the market when the company went into bankruptcy), and the second is the new common stock that the company issued as part of its reorganization plan. If the old common stock is traded on the OTCBB or on the Pink Sheets, it will have a five-letter ticker symbol that ends in "Q," indicating that the stock was involved with bankruptcy proceedings. The ticker symbol for the new common stock will not end in "Q". Sometimes the new stock may not have been issued by the company, although it has been authorized. In that situation, the stock is said to be trading "when issued," which is shorthand for "when, as, and if issued." The ticker symbol of stock that is trading "when issued" will end with a "V". Once the company actually issues the newly authorized stock, the "V" will no longer appear at the end of the ticker symbol. Be sure you know which shares you are purchasing, because the old shares that were issued before the company filed for bankruptcy may be worthless if the company has emerged from bankruptcy and has issued new common stock.
During bankruptcy, bondholders will stop receiving interest and principal payments, and stockholders will stop receiving dividends. If you are a bondholder, you may receive new stock in exchange for your bonds, new bonds, or a combination of stock and bonds. If you are a stockholder, the trustee may ask you to send back your old stock in exchange for new shares in the reorganized company. The new shares may be fewer in number and may be worth less than your old shares. The reorganization plan will spell out your rights as an investor, and what you can expect to receive, if anything, from the company.
The bankruptcy court may determine that stockholders don't get anything because the debtor is insolvent. (A debtor's solvency is determined by the difference between the value of its assets and its liabilities.) If the company's liabilities are greater than its assets, your stock may be worthless. Contact your local Internal Revenue Service (IRS) office or call 1-800-829-1040 for information about how to report worthless securities as a loss on your income tax return. If you don't know whether your stock has value, and you can't find a stock or bond price in the newspaper, ask your broker or the company for information.
TravelDude
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United's response to yesterdays wild stock swing.
UAL Corporation today filed a 10-K report with the
U.S. Securities and Exchange Commission, providing
an annual report on its 2003 financial performance.
Much of the information in this report was
previously announced in the Jan. 27 Special
NewsReal. As part of its 10-K, the company stated
that, "we believe that UAL's presently outstanding
equity securities (common stock and preferred stock
series B ) will have no value and it is expected that
those securities will be canceled under any plan of
reorganization that we propose."
"Since June 2003, we have been stating that we
believe it's highly likely that UAL equity will be
canceled under our company's plan of
reorganization," says Jake Brace, executive vice
president and chief financial officer.
"Accordingly, we urge that caution be exercised with
respect to existing and future investments in any
UAL security prior to our exit from bankruptcy."
The complete 10-K report on 2003 will be available
later this morning on united.com in the 'About
United' section in 'Investor Relations' under 'SEC
Filings.' Employees with questions about this 10-K
can send them through SkyNet Feedback by clicking
the 'Feedback' button at the top of any SkyNet web
page and directing comments to the 'news' category.
UAL Corporation today filed a 10-K report with the
U.S. Securities and Exchange Commission, providing
an annual report on its 2003 financial performance.
Much of the information in this report was
previously announced in the Jan. 27 Special
NewsReal. As part of its 10-K, the company stated
that, "we believe that UAL's presently outstanding
equity securities (common stock and preferred stock
series B ) will have no value and it is expected that
those securities will be canceled under any plan of
reorganization that we propose."
"Since June 2003, we have been stating that we
believe it's highly likely that UAL equity will be
canceled under our company's plan of
reorganization," says Jake Brace, executive vice
president and chief financial officer.
"Accordingly, we urge that caution be exercised with
respect to existing and future investments in any
UAL security prior to our exit from bankruptcy."
The complete 10-K report on 2003 will be available
later this morning on united.com in the 'About
United' section in 'Investor Relations' under 'SEC
Filings.' Employees with questions about this 10-K
can send them through SkyNet Feedback by clicking
the 'Feedback' button at the top of any SkyNet web
page and directing comments to the 'news' category.
Here are a couple of good stories on the recent "sucker's rally" in UAL:
http://www.thestreet.com/_yahoo/markets/er...n/10146717.html
http://www.thestreet.com/_yahoo/markets/er...n/10146493.html
Today it's dropping like a rock.
http://www.thestreet.com/_yahoo/markets/er...n/10146717.html
http://www.thestreet.com/_yahoo/markets/er...n/10146493.html
Today it's dropping like a rock.
What are UAL bonds trading for? I'd be surprised if they're trading for more than 25 cents on the dollar.
For those that don't know, bondholders have to be made whole (100 cents on the dollar) before stockholders see a dime.
UALAQ's stock price looks like an inefficiency in the market ... or, simply put, there's a stupid, greedy 'investor' behind every tree. (PT Barnum's axim of a sucker born every minute holds true in the digital age). Anyone buying UAL stock hoping to see a return might as well use dollar bills to fire up their barbeques; it'd give them a better return on their money.
For those that don't know, bondholders have to be made whole (100 cents on the dollar) before stockholders see a dime.
UALAQ's stock price looks like an inefficiency in the market ... or, simply put, there's a stupid, greedy 'investor' behind every tree. (PT Barnum's axim of a sucker born every minute holds true in the digital age). Anyone buying UAL stock hoping to see a return might as well use dollar bills to fire up their barbeques; it'd give them a better return on their money.
