NWA Stock

[PlayTheOdds]

NORTHWEST AIRLINES# (Other OTC:NWACQ.PK) Delayed quote data
Just how high will NWA stock go while in bankruptcy? Also there is a company buying up NWA debt from vendors for pennies on the dollar, I don't get the angle on this. What are the chances of NWA keeping its bankrupt stock? The NWA mechanics took stock options as part of some concessions in the late nineties. What is to become of this stock of theirs?


Last Trade: 0.78
Trade Time: 3:58PM ET
Change: 0.05 (6.85%)
Prev Close: 0.73
Open: 0.74
Bid: N/A
Ask: N/A
1y Target Est: 4.38

Day's Range: 0.74 - 0.80
52wk Range: 0.30 - 0.85
Volume: 2,823,242
Avg Vol (3m): 959,821
Market Cap: 67.86M
P/E (ttm): N/A
EPS (ttm): -44.56
Div & Yield: N/A (N/A)

 

[FWAAA]

The existing stock will be canceled if/when a plan of reorg is confirmed by the bankruptcy court. New stock will be issued to creditors in exchange for unsecured debt and possibly to management and new investors.

Only idiots would buy NW stock after the bankruptcy filing.

 

[eolesen]

Only idiots would buy NW stock after the bankruptcy filing.

I guess that explains PTO's interest in the current price.

 

[UAL_TECH]

I recommend that SCABS buy all the NWA stock that they can.
It can only go up from here, right?
For the rest of the potential investors, go to Vegas, at least you get free drinks.......

B) UT

 

[UAL_TECH]

That isn't quite correct. Everyone knows that the liklihood of the stock cancelling upon emergence is VERY VERY high, there is still enough movement to warrant some short term "plays"

If it's trading for lets say 35 cents today and I by a million shares and 60 days later sell it for 47 cents a share I just made $120,000.00 on a 350,000 dollar investment, So tell me who the dummy is? That's pretty hefty gain.

Or you can sell short.
B) UT

 

[Kev3188]

The NWA mechanics took stock options as part of some concessions in the late nineties. What is to become of this stock of theirs?

Good question.

Currently, it's accruing interest in people's 401k's at 12% annually.

Not sure about the mechanics, but on the IAM took the company to court and a judge ordered NW to pay out what was owed on that stock (someone on here will correct me, but I believe the strike price was 39/share?), but then NW filed for BK, and so that money is on the "creditors owed" list.

FWIW, telling all of the employees "the reason we can't pay is 'cause we're incorporated in Delaware and it's not legal there" was quite possibly the weakest thing I've ever heard come from this company's Ministry of Propaganda.

 

[PlayTheOdds]

Only idiots would buy NW stock after the bankruptcy filing.

It just so happens I bought 9,000+ shares at around 0.34. The question is, when to sell. I got burnt with K-mart I don't care to let that happen here, I don't care to leave any money on the table either. Like PineyBob said, "there is room to play", timing is everything though.

Kev, can the mechanics sell their stock or is there some clause that is preventing them from selling?

Also does anyone have a clue as to why a company would buy NWA debt from the vendors? I'm missing the angle on that one.

 

[slothman2000]

Good question.

Currently, it's accruing interest in people's 401k's at 12% annually.

Not sure about the mechanics, but on the IAM took the company to court and a judge ordered NW to pay out what was owed on that stock (someone on here will correct me, but I believe the strike price was 39/share?), but then NW filed for BK, and so that money is on the "creditors owed" list.

FWIW, telling all of the employees "the reason we can't pay is 'cause we're incorporated in Delaware and it's not legal there" was quite possibly the weakest thing I've ever heard come from this company's Ministry of Propaganda.

The price of the stock (common shares) was $33.33....they did not give common shares though they were preferred..the price was 46 and some change. If you read the deal that was cut by the IAM for a "put" on the stock back in '93, they anticipated that it might tank and the agreement was to recoup what was put in after 10 years regardless of the price. Of cource good ole nwa screamed poverty in 2003, hence was taken to court, hence the interest being accrued on the stock. It was quite interesting to read in the nwa q+a for the recent agreement that you could sell the stock that you had. Because of the pending situation, i would suspect that they would want everyone to sell if they were still holding...

 

[finman]

Also does anyone have a clue as to why a company would buy NWA debt from the vendors? I'm missing the angle on that one.

The unsecured debt that is owed will be settled at the end of the bankuptcy process for a fraction of its value, and will likely be in the form of the newly issued common stock. If a company buys a bunch of debt for 30 cents on the dollar, and the settlement payout is 25 cents on the dollar, and the stock price doubles in the first year (like United's did), then you make a 20 cent per dollar profit. There are a few companies that are buying up as much of this debt as they can, for anywhere from 20 to 50 cents on the dollar, as a speculative play on both the initial stock settlement and the subsequent performance of that stock.

 

[proAMT]

9,000 shares of bankrupt stock? Sounds like you were trying to get something for nothing again and more than likely you will get just what you deserve scab.

I suggest buying thousands of shares more.

 

[Kev3188]

The price of the stock (common shares) was $33.33....they did not give common shares though they were preferred..the price was 46 and some change. If you read the deal that was cut by the IAM for a "put" on the stock back in '93, they anticipated that it might tank and the agreement was to recoup what was put in after 10 years regardless of the price. Of cource good ole nwa screamed poverty in 2003, hence was taken to court, hence the interest being accrued on the stock. It was quite interesting to read in the nwa q+a for the recent agreement that you could sell the stock that you had. Because of the pending situation, i would suspect that they would want everyone to sell if they were still holding...

Thanks for the info...I knew someone would have it.

 

[FWAAA]

FWIW, telling all of the employees "the reason we can't pay is 'cause we're incorporated in Delaware and it's not legal there" was quite possibly the weakest thing I've ever heard come from this company's Ministry of Propaganda.

Oddly enough, the NW lawyers were completely correct on that score. When the board is faced with potential personal liability for distributions that would cause insolvency, most directors choose the safe path.

Weak? Only in the minds of those unfamiliar with corporate law.

That isn't quite correct. Everyone knows that the liklihood of the stock cancelling upon emergence is VERY VERY high, there is still enough movement to warrant some short term "plays"

If it's trading for lets say 35 cents today and I by a million shares and 60 days later sell it for 47 cents a share I just made $120,000.00 on a 350,000 dollar investment, So tell me who the dummy is? That's pretty hefty gain.

Sure, Piney. 35% in two months is remarkable. For every 100 idiot day traders (and scab speculators) in bankrupt airline stock, there will no doubt be a winner or two. Still doesn't change my view of anyone buying NW stock. And you're right - although the stock will likely be canceled, it's not a 100% certainty.

Wasn't real bright of me loading up on AMR in late 2002 and early 2003, but I made a fortune doing so. Sometimes gambling has its rewards. Doesn't make my decision to buy stock in a nearly bankrupt airline any less stupid.

Figures that SuperScab's investment expertise has been spent on his previous bankrupt employer's existing (soon to be canceled) stock.

 

[dc3fanatic]

It just so happens I bought 9,000+ shares at around 0.34. The question is, when to sell. I got burnt with K-mart I don't care to let that happen here, I don't care to leave any money on the table either. Like PineyBob said, "there is room to play", timing is everything though.

Kev, can the mechanics sell their stock or is there some clause that is preventing them from selling?

Also does anyone have a clue as to why a company would buy NWA debt from the vendors? I'm missing the angle on that one.

Sell now. Take it and run and don't look back.

 

[PlayTheOdds]

Sell now. Take it and run and don't look back.

You're more than likely right. I think I'll give it another week or two. I just hate reacting to an antsy feeling.

 

[Kev3188]

Oddly enough, the NW lawyers were completely correct on that score. When the board is faced with potential personal liability for distributions that would cause insolvency, most directors choose the safe path.

Weak? Only in the minds of those unfamiliar with corporate law.

I know that it was "correct" as far as corporate law goes; my objection is/was with the way they handled the whole situation.