This stock should be trading at or above $15 right now on Oil going below $90. Slam Dunk. I lost $3G shorting Puts because the cost of the merger is so prohibitively expensive to LCC shareholders the price of shares can't get moving. Street loves the merger, hates the financing of debt. Consequently, while they gouge fees from the players involved, LCC shareholders get left holding the bag on AA debt. Not good.
LCC shareholders lost a possible 17-18% or so, but that will be off the top end where ever that is. AA will probably end up with north of 700 million shares instead of 600 million. Although LCC could have done well as a standalone, there were scenarios where that extra 17-18% wouldn't have been realized as well. I won't list them here. LCC did increase their chances of successfully going forward. It's going to be good.
Sure LCC sold off ... obviously there were many holding for the bump in the stock that didn't happen. And some other hedging strategies. This will go higher ... just not the expected overnight jump ... but it will be more than the expected "bump".
BTW news has been saying the last few days that the recent fare hike is sticking. When did that fare increase go into effect? With load factor up - that has to be a goods thing for this quarters earnings?????