If you had 5,000 AAMRQ shares, and you got an initial disbursement of 338 AAL shares, you'll probably get somewhere around 625-775 AAL shares from EACH of the next 4 disbursements.
What do you guys think of the AAL 2 year call options? I believe that this stock is going to go up into the $30+ range in the next two years. As a former AAMRQ owner, I decided to take my first AAL stock disbursement and convert it into Jan 2016 $20 call options. I've never messed with options before, but the $20 strike price seems low enough to offer some safety, as does the Jan. 2016 expiration date. Have any of the rest of you been considering these LEAPS?
Yep. I think a lot of the AAMRQ holders have realized that there's not much they can do except sit and wait on their shares for a while. The day traders also may have gone elsewhere.
We had a nice first week of trading, but the second week wasn't so kind. I was hoping we would end up at least a few percentage points, but instead we ended in negative territory, and I'm not sure why. Were there any downgrades to the stock?
Yep, did it last week for 1st time using AAL & the AAMRQ distribution. Since this was my first time & I don't have a lot of tolerance for risk, I bought LEAPS. In other words, Jan. 2016 - or more than 2 years until expiration, which makes it very unlikely that they would expire before I could profit on them. I also think this makes it a lot more likely that I would be able to participate in a rally that might be driven by "synergy savings" from the merger, which might not materialize properly until 2015. I also chose a $20 strike price. The stock might have a chance of hitting twice this amount over two years, but it only cost me $8.80 per share to lock in the possibility of buying those shares for $20 each. Of course, I might just decide to sell the call options instead of exercising them, in the end.
Sure, I made a decent amount after buying AAMRQ at $7.40 a share, but I consider that profit jump to be in the past, and mostly related to the bankruptcy/merger. Now I'm looking forward to the future. I guess what I "expect", or hope for, is at least 1% appreciation a week, as more investors and funds pile in over time. I don't care much about day to day, but I do hope for it going up a little every week. Maybe I should change my focus to monthly, rather than weekly, to get a better perspective. I do, however, find it somewhat ironic that everybody seemed to give me a thumbs up when I pointed out the ~8% up last week - just pointing out the facts. However, all I got was thumbs down for pointing out the very same thing this week.
It only seems like a "huge" premium for those who are used to buying short term options that have a huge risk of expiring worthless. I have no interest in anything other than LEAPS, due to a bad experience with an inverse silver ETF that I lost money on. I'm not good on short term timing.
By the way, are there some lurkers on this board who seem to relish giving thumbs down for some reason? Initial poster asked if anyone else is buying AAL call options, and what they bought, so I responded with an on topic reply. I'm not sure why anyone would be reading this topic unless they were interested in AAL options, and I wasn't trolling or off topic.
Yahoo shows AAL with 6.76 billion in cash, and 11.7 billion in debt. Is this current info?
I was wondering if they are counting former AAMRQ shareholders as "debt" until it is converted to common shares?
I bought AAMRQ at about $7.40 per share. I told myself I'd be very satisfied if it roughly doubled in the next year. I calculated 13 shares per hundred original AAMRQ shares, then multiplied by a somewhat pessimistic $26.40 a share average share price to get value. I multiply this by 4, then add the initial disbursement to get total estimated ending value. (I realize that the stock can go up or down in the meantime, and final results can vary quite a bit because of that)
I end up with a "current projected value" of about $15.30 for each original AAMRQ share. Did I make a math mistake somewhere, or is there something that I am not taking into consideration?
I never would have imagined that this stock would hit $29 this quickly - I figured it would slowly get up there over 5-6 months. It will be interesting to see if it can hold on to those levels, or if people will take profits.
I realize that it would be tempting to sell right away, since this has gone up a decent amount. However, if it goes up another $10 in the next 5 months, will you still be happy you sold now? This isn't as impossible as it might seem - consider that it has gone up about $5 in just a month or so.
For the most part, I consider selling now to be "losing money", not making it. In fact, I invested my initial distribution into $20 Jan. 16 LEAP calls - now up 27%.
Hmm. I can see both sides of this. I would probably be annoyed if I had been on this board, and suddenly lots of aamrq stock folks got on here and started spouting stuff over and over about the conversion. There are a lot of folks on here that will not be affected by this conversion at all, other than to constantly get on here and feel annoyed because it looks like their hangout has been taken over - often by uninformed folks who often have no long term interest in the company. Of course, from the other side of things, those with significant involvement in AAMRQ may not fully internalize how this conversion is going to work until they have had a couple of distributions a month from now. To them, the # of shares they get is paramount, and they may be worried that they are going to somehow get "gypped", or something along those lines. I am in the latter group, having invested quite a bit of various funds (our car fund, mission fund, etc.) into AAMRQ. I'm very happy with how it seems to be turning out. My gut feeling is that I should hold on to this for a while. However, if it gets up over ~$32 a share or so, I may be tempted to sell some of this.
I've owned in my retirement account since the shares were $13. Yes, I bought back when I thought the dividend was backed by the government, and that they would not let the dividend disappear. I was convinced that it was a "safe" investment in troubled times. I've held on hoping that they would eventually pay off all of the debt, and the dividend would reappear - hopefully sending the preferred stock back to $25.
According to investor relations, tentatively on Jan. 28.
If you have a question like this in the future, go up to where it says "search message boards", then enter something like "earnings date", and you can see the relevant posts.
Interesting article at "The Street", which says considering that other airlines are paying a dividend or have announced one, that 2017 is too late for them to begin paying a dividend, while 2015 is likely too soon. Therefore, evidently they believe that American will begin paying a dividend on shares by 2016.
I just read an article on TheStreet where it says:
"Something is potentially going on between Alaska (ALK_) and American Airlines (AAL_) but Alaska executives won't say exactly what it is."
"the two airlines are talking, which isn't surprising given that Delta (DAL_) is engaged in an effort to bulk up its flying into Alaska's Seattle hub and plans to compete with Alaska on a variety of key domestic routes. "
"We're getting to know the new American management team," Harrison said during the call. "I have met with their alliances folks, and we have started discussions about how we might work with the new American."
It's kind of interesting reading between the lines in the article, and it really makes it sound like the two are getting rather cozy.
What do you think, is this just two companies deciding to cooperate to try to "screw" Delta, or is something more going on here?
Couldn't they spend 15% of their cash hoard for something like a 25% minority stake in Alaska Air? Yes, I'm fairly new to AAL - I've only been paying attention for about 3 months, and my AAMRQ is slowly converting. However, I thought that a company could take a minority stake in a regional carrier without the Dept. of Justice getting involved, so long as it isn't a controlling interest. (is that incorrect?) I thought that it was purchasing all of a company, or at least a controlling interest that brought intense regulatory scrutiny.
I don't think that American is currently interested in another merger, though they might have the experience and cash hoard to pull a smaller one like this off. However, the present political climate would not be conducive - right now. That's not to say they couldn't lay the groundwork for one that might happen a few years down the road. It might not be such a bad way to pull the two companies closer together, deny Delta a profitable expansion, and get an additional revenue stream for AAL stockholders.