Should I Buy Ual Stock?

[veggiegrrrl]

Hi everyone,
Do you think buying UALAQ stock (or UAL stock) is a good investment now?
Look at AMR. Was at 2.00...now it's nearly 18.00.
Advice? Warnings?
Does UALAQ stock convert to UAL stock once UA emerges from bankrupcy?
Talk to me like I'm a ten year old. I'm a newbie.
Thanks,
Amy
(eight years with AA but no longer)

 

[UnitedChicago]

Amy...i wouldn't. The stock will likely be worthless when they emerge. there are some that do short-term buys and sells...but this isn't a long-term investment.

 

[TravelDude]

I recommend going to this site on united.com:
http://www.united.com/page/framedpage/0,14...49,1378,00.html

United warns that the stock could become worthless, but take a look around at the FAQ's.

 

[FWAAA]

Hi everyone,
Do you think buying UALAQ stock (or UAL stock) is a good investment now?
Look at AMR. Was at 2.00...now it's nearly 18.00.
Advice? Warnings?
Does UALAQ stock convert to UAL stock once UA emerges from bankrupcy?
Talk to me like I'm a ten year old. I'm a newbie.
Thanks,
Amy
(eight years with AA but no longer)

Only buy UAL with money you would otherwise use for lottery tickets (money you can afford to throw away).

UAL has warned (as other posters above have said) that the stock will likely be canceled. New common stock will be issued to the unsecured creditors, not the existing common stockholders. Existing stockholders will probably get nothing, and like it. Same thing happened at K-Mart and USAir when they emerged from bankruptcy.

UAL stock has nothing in common with that of AMR. AMR never filed for bankruptcy. The odds that the existing UAL stock hits $18 are probably smaller than the odds of you being the first person to set foot on Mars after having won the Powerball and marrying Ashton Kutcher. Seriously.

Look for other investments in companies that haven't publicly warned that their existing stock is soon going to be canceled.

 

[JAMAKE1]

Amy:

Buying stock in UAL now is like running down to the casino with your

unemployment check, hoping to hit a jackpot. Don't do it.

Peace.

 

[novaqt]

Amy:

The fact that you even need to ask the question means you should not take a change investing in UAL at all. Put your hard earned money in health care or biotech.

 

[iflyjetz]

Amy, you should not buy UAL stock. The reason is that UAL is in Chap 11 proceedings. When UAL emerges from Chap 11 the old stock will be terminated. If there is any money left over the stockholders of current UAL will receive cash or an issuance of new stock.
However, you need to understand the bankruptcy process a bit better. UAL has borrowed money from secured and unsecured creditors, owes money to suppliers, and has issued bonds along with stock.
Here's the order of who gets paid (roughly; I make no guarantee on the accuracy):
Suppliers who are owed for goods and services
Secured creditors
Unsecured creditors
Bondholders
Stockholders

By the time that bondholders get paid, they will be lucky to get 20 cents on the dollar. Since they will most likely not get fully paid off, there will be no money for current stockholders.

I realize that spending time watching CNBC and reading financial journals is akin to being drawn and quartered, but I highly recommend that you do a decent amount of research before investing in an individual stock.
If you look around the 'net a bit, you will find out why buying stock in bankrupt companies is so bad. Here's a link to the SEC website; you will find it extremely helpful:

http://www.sec.gov/investor/pubs/bankrupt.htm

 

[savyinvestor]

Amy, you should not buy UAL stock. The reason is that UAL is in Chap 11 proceedings. When UAL emerges from Chap 11 the old stock will be terminated. If there is any money left over the stockholders of current UAL will receive cash or an issuance of new stock.
However, you need to understand the bankruptcy process a bit better. UAL has borrowed money from secured and unsecured creditors, owes money to suppliers, and has issued bonds along with stock.
Here's the order of who gets paid (roughly; I make no guarantee on the accuracy):
Suppliers who are owed for goods and services
Secured creditors
Unsecured creditors
Bondholders
Stockholders

By the time that bondholders get paid, they will be lucky to get 20 cents on the dollar. Since they will most likely not get fully paid off, there will be no money for current stockholders.

I realize that spending time watching CNBC and reading financial journals is akin to being drawn and quartered, but I highly recommend that you do a decent amount of research before investing in an individual stock.
If you look around the 'net a bit, you will find out why buying stock in bankrupt companies is so bad. Here's a link to the SEC website; you will find it extremely helpful:

http://www.sec.gov/investor/pubs/bankrupt.htm

I would buy U stock as they will be the remaning entity after the merger! NOT! Savy

 

[Winglet]

You can day trade it, but don't you dare own it overnight.

 

[Busdrvr]

I'd say it's a definate buy. The stock certificates cost less per square foot than many premium wall papers, and would lend a unique look to your bathroom walls