Just using round numbers ... Forward estimates put LCC making $600+ million with their $14-15 billion in revenue.
If AMR gets 75%, that implies they should make $1.8+ billion with their $24 billion in revenue. (They only need $8 billion in revenue to produce the earnings that LCC produces with $14-15 billion in revenues.) DAL has trouble making $1.8 billion with $37 billion in revenue, but we are to believe AMR can make that much?
Well if AMR does make that much, then LCC's earnings estimates will be unchanged ... and why would the stock go higher? If AMR contributes less than $1.8 billion in profits ... the stock price drops.
Well.... I don't think "ridiculous" is the proper word.... eventhough nothing makes sense anyway. I would chose the word "realistic" instead.
jmo....... but I am starting to believe that people who for so long hoped to soon get a steak will be handed a bone.
Why go there? Well the whole idea of a split like that is ludicrous unless there is some extremely good undisclosed explanation for it.
I believe, LCC shareholders will have to vote on this ... my votes are relatively peanut crumbs, but others with bigger chunks may have objections too. I think LCC has only 400 million shares authorized. A 50/50 split will allow for 200 million shares ... anything else will require a shareholder vote to authorize more shares to give to the AMR stakeholders. But who knows ... I'm not a by-law expert.