Now that the average person thinks AAL is worth less than $40.....
With the ~10% drop over the past 4 days, I guess the average investor now thinks that American Airlines fair price for the stock is down closer to $39 instead of the $47-$48 a lot of folks were talking about. I'm a bit surprised by this, especially with the announcement of a dividend, which I thought just about everyone was hoping for. I thought that a dividend announcement would lead to a bunch of institutional buying, and buying from the folks like an older friend of mine who won't consider ANY stock unless it is paying a dividend. I also liked that they were paying down the debt faster - any mention of that makes me happy.
Evidently there is a LOT more short term viewpoint controlling this stock than long term, or at least that would have to be my conclusion after watching this happen.
Do you see continued weakness in this stock continuing for some time, or do you think it will rebound?
The dividend was the worst thing that management could of done to this stock. Momentum player which drove AAL to it's present level well bail. Momentum traders do not play dividend stocks. At best AAL is a $30 to $35 stock.
You must not have owned this stock for long. Go look at it's action over the past 8 months. When it reaches highs, it drop by about 10% and then rebounds. Who knows what will happen now. It has strong technicals and rave reviews from analysts but the market can do odd things. I am long and will be for a long time although I do have stops in place.