Who's buying stock !

[odie01]

Well, then, put your money on AMR. Me? Lightning struck once, but I don't believe it will strike twice. I take the chest-thumping employee posters at their word when they proclaim that "the concession stand" is closed outside of Ch 11.



Sure, had you bought 3,000 shares at $5/sh on May 1, 2003, when the concessions were imposed, those shares would have been worth $120k in January, 2007. My belief then was that if you were willing to "invest" $120k or more (turns out it was more) in concessions with very limited upside potential (just 450 or so options you were awarded), then it made some sense to invest just 13% more (another $15k) that had real upside potential. And by January, 2007, that upside was there. Yes, your 450 or so shares were worth about $16k of profit (after the $5 strike price) but of course that was less than one year's concessions, right?

What makes it more risky now? You're joking, right?

Here are some of the factors:

1. In 2003, AMR was coming off of just two very huge annual losses and there was hope that things would turn around. Now, AMR is set to report its fourth consecutive huge loss and its ninth large loss in the past 11 years. You'd have to be high to think that AA is magically going to turn things around again ala 2003-07.

2. There was a chance that US and/or UA might fail to successfully reorganize, which would have helped AA tremendously. Turns out that after two bankruptcies, US survived. UA survived and merged with CO, with a pretty good cost structure. As expected, DL and NW filed for bankruptcy protection, merged, and appear stronger than ever with industry-leading low costs. As WT continually points out, both are eating AA's lunch in NYC and LA and CHI and elsewhere.

3. In 2003, AMR had a lot of furniture to burn. Over the past eight plus years, AA indeed burned most of it. Sold off various non-core assets plus sold some new stock to suckers when the price was high and sold a fair amount of new debt to suckers. Today, nearly all assets are encumbered. There's nothing left to mortgage or sell except for AA's family jewels, like LHR or NRT or S America. AA missed the boat on selling Eagle and now is going to just spin it off to the AMR stockholders.

4. Most employees willingly invested eight plus years in hopes that AA could turn things around. I doubt that the employees are going to willingly invest another couple of billion of concessions for another few years outside of Ch 11.

That's just four reasons off the top.

Recall all the posts during 2003-06 or so by many long-time posters here who repeatedly claimed that AA was going to file Ch 11 even after ramming the concessions down your throat? I gambled that Arpey would not and that the stock would rise. And rise it did. I don't see it happening again, no matter how simplistically you paint today's revenue numbers.

Thanks
I'll buy 6000 shares, 12k downside, 60+k upside for long position. You should take some of the cash your getting to post here and roll the dice. 😀

 

[Bob Owens]

Well, then, put your money on AMR. Me? Lightning struck once, but I don't believe it will strike twice. I take the chest-thumping employee posters at their word when they proclaim that "the concession stand" is closed outside of Ch 11.



Sure, had you bought 3,000 shares at $5/sh on May 1, 2003, when the concessions were imposed, those shares would have been worth $120k in January, 2007. My belief then was that if you were willing to "invest" $120k or more (turns out it was more) in concessions with very limited upside potential (just 450 or so options you were awarded), then it made some sense to invest just 13% more (another $15k) that had real upside potential. And by January, 2007, that upside was there. Yes, your 450 or so shares were worth about $16k of profit (after the $5 strike price) but of course that was less than one year's concessions, right?

What makes it more risky now? You're joking, right?

Here are some of the factors:

1. In 2003, AMR was coming off of just two very huge annual losses and there was hope that things would turn around. Now, AMR is set to report its fourth consecutive huge loss and its ninth large loss in the past 11 years. You'd have to be high to think that AA is magically going to turn things around again ala 2003-07.

2. There was a chance that US and/or UA might fail to successfully reorganize, which would have helped AA tremendously. Turns out that after two bankruptcies, US survived. UA survived and merged with CO, with a pretty good cost structure. As expected, DL and NW filed for bankruptcy protection, merged, and appear stronger than ever with industry-leading low costs. As WT continually points out, both are eating AA's lunch in NYC and LA and CHI and elsewhere.

3. In 2003, AMR had a lot of furniture to burn. Over the past eight plus years, AA indeed burned most of it. Sold off various non-core assets plus sold some new stock to suckers when the price was high and sold a fair amount of new debt to suckers. Today, nearly all assets are encumbered. There's nothing left to mortgage or sell except for AA's family jewels, like LHR or NRT or S America. AA missed the boat on selling Eagle and now is going to just spin it off to the AMR stockholders.

4. Most employees willingly invested eight plus years in hopes that AA could turn things around. I doubt that the employees are going to willingly invest another couple of billion of concessions for another few years outside of Ch 11.

That's just four reasons off the top.

Recall all the posts during 2003-06 or so by many long-time posters here who repeatedly claimed that AA was going to file Ch 11 even after ramming the concessions down your throat? I gambled that Arpey would not and that the stock would rise. And rise it did. I don't see it happening again, no matter how simplistically you paint today's revenue numbers.

Well if you were on the inside then you could see how AA could easily turn things around. As I've said many times before AA has been on a spending spree, burning cash quicker than they bring it in. You claim that the things I point out such as continueing to fly unprofitable routes, refurbishing the terminals, buying new furniture(they didnt burn it they paid it off and bought new), computers, renovating the hangars are all small change, . I dissagree, add it up across the system and its got to be a huge amount of money. AA doesnt hesitate to spend on anything, except for contracts for its workers.

Besides the "simplistic" but very real numbers that show that AA is in much better shape than it was in 2003 what would AA gain in BK? The Pension? They already admitted that it would not save them money to switch to a DC, that it would cost more now, it just provides an accounting adjustment. Take away the retiree medical? Well if they do that then they have no chance of taking my $13,000. Work rules? Which ones? We already have the laest amount of vacation, the least amount of sick time, the fewest paid holidays and the lowest rate of Holiday pay. We also have the fewst IOD days. Shed OH? To who? The system is already over burdened to the point where if I make a simple observation such as "If all the A&Ps in the industry refused to work more than 40 hours the system would shut down", sends management to the government claiming I'm calling for a job action. The planes that went to Timco really maens that AA could not get Delta or any other carrier to do the work that we scould not handle. Some stations have over 1000 hours of OT for the Year. JFK is around triple the norm. AA is raiding Eagle and Delta for mechanics.

 

[odie01]

Besides the "simplistic" but very real numbers that show that AA is in much better shape than it was in 2003 what would AA gain in BK? The Pension? They already admitted that it would not save them money to switch to a DC, that it would cost more now, it just provides an accounting adjustment. Take away the retiree medical? Well if they do that then they have no chance of taking my $13,000. Work rules? Which ones? We already have the laest amount of vacation, the least amount of sick time, the fewest paid holidays and the lowest rate of Holiday pay. We also have the fewst IOD days. Shed OH? To who? The system is already over burdened to the point where if I make a simple observation such as "If all the A&Ps in the industry refused to work more than 40 hours the system would shut down", sends management to the government claiming I'm calling for a job action. The planes that went to Timco really maens that AA could not get Delta or any other carrier to do the work that we scould not handle. Some stations have over 1000 hours of OT for the Year. JFK is around triple the norm. AA is raiding Eagle and Delta for mechanics.

Unlimited OT, Bag fee's, fuel surcharges, upgraded terminals and admiral clubs, 460 new airplanes, new hires in management and in all three unions, 4.8 bil in cash, airplanes full, new computers in Taesl with screen savers that read: Greenest Fleet, Largest Aircraft Order in History, 8+fare increases, hangers full of planes, TV commercials, internet adds out the ###, load factors up, economy slowly turning the corner, no contracts yet with the unions after 8 years of concessions. ect,,ect...American is a name that will not prelude bankruptsy

 

[chris perry]

Dont forget the two AA center's,big screen TV's everywhere,goldhoffer tugs 850k each system wide,new push tractors,new fleet tugs,repainted whole fleet of carts,relocated facilities maint,new offices in term A,new work stands,relocated stores (tool room)at hgr. Doesn't much sound like we're worried about cash conservation....and oh yes 460 airplanes...I almost forgot.