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American Airlines Group Inc. Message Board

  • junkmanlong junkmanlong Dec 10, 2013 5:36 PM Flag

    AAMRQ distribution formula version 2

    AAMRQ 394.2 million fully diluted outstanding shares
    AAMRQ debt with VWAP discount (5.655 claims / 0.965 discount) = $5860 million
    AAMRQ debt $5.860 Billion claims + 1.817 billion owed union = $7677 million
    AAL 756 million outstanding shares
    source sec 8k filing

    AMR stakeholders get 72% of the new company
    Source BK dockets
    Subtract out the 3.5% initial and AMR stakeholders get 68.5% at the distribution periods.
    [(AAL * 756 million * 68.5% ) – 7677 million ]/394.2 million
    Simplified
    (AAL * 1.314) – 19.47 = AAMRQ value
    (25 * 1.314) – 19.47 = $13.38
    To calculate shares
    ([(AAL * 1.314) – 19.47] / AAL) * number of AAMRQ shares = AAL shares

    So if you have 1000 shares and the stock stay at $25 for the 120 day distribution period.
    Initial distribution 3.5% of the common goes to AAMRQ stockholders
    1000 * [(756 million * 3.5%) / 394.2] = 67 AAL shares
    Then for the next 4 distributions at 30,60,90 and 120 days
    For each distribution 1000 / 4 = 250 AAMRQ shares
    @30 ([(25 * 1.314) – 19.47] / 25) * 250 AAMRQ shares = 134 AAL shares
    @60 ([(25 * 1.314) – 19.47] / 25) * 250 AAMRQ shares = 134 AAL shares
    @90 ([(25 * 1.314) – 19.47] / 25) * 250 AAMRQ shares = 134 AAL shares
    @120 ([(25 * 1.314) – 19.47] / 25) * 250 AAMRQ shares = 134 AAL shares
    If AAL stays at $25 and you had 1000 AAMRQ shares at the end of 120 days you should have 603 AAL shares
    IMO..JML Less

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    • if we are at the $40 range for the 3rd distro March 9th - what might the % be

    • havatoy@aol.com havatoy Feb 10, 2014 1:22 PM Flag

      Today AAL issued a huge amount of shares to us AAMRQ former owners. Of course there was an initial rush of shareholders to sell (perhaps initial investment). Now that shares traded goes from heavy in am to light now, shares just starting continued upward trend.
      Strong buy to 50/sh-in 45 days, then after earnings & huge cash reserves, continued stock buy back & dividends! Very STRONG BUY! Keep this narrative & compare in 2 months to stock price! Long term investment!

    • junk, thanks for your help on this one.

    • junkmanlong; thanks for sharing your formulas. I did a different approach than you by using their own data from the Hommer Parkill declaration and is slightly off from yours. From the Table on page 21; if I use the $26 AAL column:
      they give us two amounts:
      3.5% (0.0665) + 27.1% (0.5149) = 30.6% (0.5814)
      So, If you have 1,000 stocks at the end of the 120 days you should get: 0.5814*26*1000 = $15,116 if the stock stays flat at $26. Your formula give us $16,423....

      Let me know if i did something wrong.

      Sentiment: Hold

      • 2 Replies to albtira
      • havatoy@aol.com havatoy Feb 10, 2014 1:25 PM Flag

        You've interpreted & extrapolated correctly, but this company is far stronger than any of us realize! How would you like to own a business with 80 + years of clients! a monopoly, with all new efficient equipment, and roll back fixed & variable costs 30 years?!

      • That chart is using old numbers for debt and oustanding shares. They did that chart before they knew the final AAL outstanding, the AAMRQ outstanding, and final debt. They didn't know for sure how much of the debt would convert to common. The formula I posted includes the current known numbers.

    • Bump, my civic duty.

    • JML - Coming back on this ... did you include the Disputed Claims Reserve of approximately $755 million in your claims calculation twice? I think it is already included in the Single Dip Claims figure.

      Sentiment: Strong Buy

      • 1 Reply to mechjr
      • double dip $2.45 billion + single dip $2.45 billion + $.755 billion disputed claims = $5.655 billion
        Taking into account VWAP discount
        $5.655 billion claims / 0.965 discount = $5.860 billion
        $5.860 billion + $1.817 billion owed union = $7.677 billion

        AAMRQ debt with VWAP discount (5.655 claims / 0.965 discount) = $5860 million
        AAMRQ debt $5.860 Billion claims + 1.817 billion owed union = $7677 million

        After giving effect to the conversions outlined above, the adjusted total Double-Dip General Unsecured Claims on the Effective Date is approximately $2.45 billion. The Allowed Single-Dip General Unsecured Claims on the Effective Date is approximately $2.45 billion and the Disputed Claims Reserve is approximately $755 million.

    • Nice summary!

      How many new shares will be eligible to be traded in next few days. We know some people have received their 3.5% distribution and some haven't. That is about 26.5 million shares.

      Some of the creditors are going to get shares in the form of convertible preferred stock and some will have to wait for future distribution dates. I assume that even for those that get conv. pref. soon it takes a few days to get the convertible preferred and then converting to shares before they can be traded.

      I am guessing this limbo state is part of the reason for AAL stock move up. Some mutual funds can't invest in bankrupt companies, so they may be buyers, but I am assuming that once the shares get traded there will be enough pressure to push the stock down. So, I am shorting AAL shares to protect my gains in AAMRQ.

      Does anyone have an idea how many shares from AAMRQ can potentially come on the market in next few days?

    • junkman..............Thumbs up for all that work despite me not needing to know since I don't own aamrq!

    • I owned 4000 shares, it was really easy to figure out. I just received my 3.5% share, which was correct at 266 and change shares. I am agreeing with Junk here on his formula.

      Sentiment: Hold

    • Hi. I am trying to read alon on this board and can't figure this out. I had 500 shares of AAMRQ in an e-trade account. I was told that they are now worth .0665 shares of AAL. this doesn't make any sense? That's a massive loss of capital? What am I missing. I admit I am a novice on conversions. Should I just wait it out and be made whole?

      Sentiment: Buy

      • 1 Reply to barabby1
      • Wait it out. You will likely recieve addtional shares at the 30-60-90-120 day milestones - as long as the AAL price stays up. You will be very grateful you held onto your shares.

        i have 925 shares that i bought at an average price of $4.275. i previously had 1000 shares that i bought at $0.55 and sold at $1.40. AAMRQ has done me well.

        Just follow JML's projections and project to your shares. Using $26.25 as a price reference (based on today's trading), I am projecting 925 shares of AAMRQ will eventually become ~590 shares of AAL.

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