AMR creditors aren't currently concentrating on who leads a combined or independent airline, instead focusing on which deal gives them the best financial benefits, said a person familiar with their thinking.
Its Official....UsAirways makes formal 8.6 billion proposal
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AMR creditors aren't currently concentrating on who leads a combined or independent airline, instead focusing on which deal gives them the best financial benefits, said a person familiar with their thinking.
Exactly. The identity of the CEO is a separate issue no matter whether AA emerges as an independent airline or is merged with US. To do otherwise would be putting the cart before the horse. The first inquiry is whether they believe that there are enough synergies to pay for the merger costs plus the much higher wages that the US employees would receive (to bring them up to AA payscales).
No matter how that decision goes, the creditors will choose the board, which hires management. Could be that the airlines are merged and Parker is shown the door. Same with Horton.
Everything is a factor in the decision. The creditors have three basic options on the table:
1. 100% of a standalone run by Horton
2. 85% of a merged carrier run by Horton
3. 85% of a merged carrier run by Parker
Parker has a track record that most investors would find to be impressive. The work groups that have not been integrated are completely out of his hands and will not be held against him by the investors.
signals
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Parker did go from $1.50 a share stock to $12+. That is impressive seeing he even invested a year of his own salary. If a merger does occur, regardless of who runs the company, Parker will still have his hands in it one way or another.
100% run by someone else should be on that list...
By that measure, Gerard Arpey, former AA CEO, walks on water as well, as AMR stock went from $3.80/sh to $41/sh between his first day as CEO in April, 2003 and January, 2007 when AMR hit its post-Sept. 11 peak before its long slow decline into Ch 11. Just a few weeks before that, AMR hit a low of $1.25/sh.
If US does not end up merging with AA, look for those LCC shares to sink well back into the single digits as much of the price gain over the past 12 months is due to investor anticipation that he'll be able to buy AMR on the cheap, benefitting the holders of LCC.
pit_needs_help
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Do not care if merger is completed but at five dollars a share that would be a PE of less than two and the company will report a fairly high profit this year and next. It shouldn't fall that far.
Sure it will. Its been a speculative bump since AA filed. Look at the chart.
Once AA emerges, IF US isn't attached, the reality of LCC's network disadvantage will smack the shareholders square in the face.
$5 was being generous.
Once AA emerges, IF US isn't attached, the reality of LCC's network disadvantage will smack the shareholders square in the face.
$5 was being generous.
Not at all. What ever happens, happens.
Have you looked at the lcc chart?
So you're saying absent a merger with AA, lcc is set to soar? Clear skies and unconfined growth lie ahead?
When stocks react the way lcc has, it's not because they're a solid company.
What does lcc's beta of .92 mean to you?
Have you looked at the lcc chart?
So you're saying absent a merger with AA, lcc is set to soar? Clear skies and unconfined growth lie ahead?
When stocks react the way lcc has, it's not because they're a solid company.
What does lcc's beta of .92 mean to you?
Jester
Veteran
It means that the stock is slightly less riskier as having lower market volatility as measured against a market benchmark (usually the S&P 500), as a whole. However, an individual stock beta may vary greatly depending upon the years being examined, and in fact, according to Yahoo finance, LCC's beta has only been .36, and has been a dog relative to the S&P 500 for the past five years.
http://finance.yahoo.com/echarts?s=LCC+Interactive#symbol=lcc;range=5y;compare=^gspc;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
If anything, it suggests LCC stock has been a low risk investment if based simply upon beta with having only about a 1/3 of the market volatility which would have a beta of 1.0. Almost a defensive stock... hard to believe.
jimntx
Veteran
True, but remember that low risk stocks also do not put you in a retirement financial position to spend freely, either. A beta below 1.0 indicates that you probably won't lose much money in this investment, but you also won't make much either.
