Prof ..." Every single stock in the market is worth the current price, we just don't like to believe it. "
Every single stock is selling for the current price.
We can discuss "mark to market" accounting ... it certainly had its part in screwing things up in 2008 ... put into effect for Q1 2008 reporting, and removed a week before the market bottom 5 years ago today. It killed banks forcing them to report loses that weren't there the quarter before, froze money, and those loses and the financial freeze created "fear" ... the necessary ingredient for layoffs ... 70% of the people losing their job, go through foreclosure. Five people on the FAS board.
JML ... you wrote, "I now think the optional conversions will be consider to be part of the 4th mandatory conversion when considering how many shares AAMRQ shareholders will receive."
In looking at paragraph that talks about the conversions for AAMRQ, I don't see anything about AALCP conversions (optional or mandatory) that impact AAMRQ conversions except for the part where there is a subtraction for being over the cap. And also the VHP which is related to the debt, but that is essentially constant (+) at this point until the final amount of debt is determined for the true-up. Is there another paragraph out there that I'm not aware of?
So if what uncle indicated is correct, the lower amount of AALCP in conversion 4 will mean just a lesser hit due to shares over the cap subtracted out.
I didn't go back and get the exact interest rate adjusted AALCP value, since it is a differential. I just used $26 ... and a VWAP of $35, and assumed a VWAP of $37.50 on the 41 million preferred (and I just used 41 million, not the exact number AAL put out). Anyway it looks like just a hair over .005 subtracted from using stoxxer's pre-cap formula, and for every buck change from the 37.50, we'd gain/lose about .0017 from stoxxer's pre-cap formula.
Someone can parse it exactly if they have the exact numbers handy, but as I said since it is a differential, I don't think it will be too material. So the hurt from the cap isn't that bad ... it is still all good ... very good.
"in order to get to $50 - it has to go UP"
Yes, it's so obvious now. Sometimes the simplest explanation is the best. Well put.
It will seek its target ... and the target's rationale is right on.
I mentioned this a few weeks ago, that an article put forward the argument that the market caps of the airlines could be headed to the value of their annual revenues. Not really that outlandish ... LUV is already in that ballpark.
Has anyone figured what the various share prices would be for each airline, if market caps ended up equaling annual revenues? Pretty interesting.
" Now we're showing 75% owned by institutional investors"
I have a lot of questions surrounding the institutional ownership figures during the distribution time. Is it based on currently issued shares? The projected issued shares? My broker is showing 77%, but is still showing 357 million shares outstanding which is obviously not the case ... but was the 77% calculated from the 357 million? So, what is the right picture?
Nevertheless, it looks like the institutions are still under invested and that is good.
" I am personally thankful for the post from the big and small investors."
Have to agree with you. Many times someone will pick something up from the news or have a thought that is helpful. And I know from other yahoo boards that there are people that write blogs and articles that actively post on the yahoo boards ... though not aware of anyone doing that on this board ... still some of the posts here are very helpful.
"It's not quite that simple. Look at the PRASMs posted by DAL---continues strong---in spite of winter weather/cancellations"
You're right it is not quite that simple. Both fuel and PRASM are only a few of the variables to make any determinations. DAL may have had a low PRASM number last February and that is why it went up YOY ... do you know? I'm not saying that to be flip, but YOY factors have to be considered. Also PRASM does contain the letters ASM ... did they fly fewer ASMs YOY ... more? What was CASM? Fuel might be the same YOY ... the airlines put through a couple of fare increases because fuel spiked last winter ... was that in January, February or March? What was the lag in revenues from the fare increases last year because of advanced bookings? And PRASM isn't RASM. Any one metric is just that ... not a complete picture.
But I still liked DAL's PRASM, as you did ... and apparently the market.
"Over the long run, companies and individuals fly less if ticket prices increase significantly."
I don't know if you missed what the industry has been doing over the last number of years, but they have been raising fares and cutting capacity if necessary if demand fell off. The airlines are not yet at the margins they want, and fuel isn't the only cost. They could use a fare increase and if demand falls off, cut capacity. The industry might go for it. Weather has bitten them, and fuel is at the high end of the range and who knows what will happen going forward. They should get ahead of things. As an investor, I'd like to see that.
sackings, you wrote ...
"Airlines stockpile fuel when oil prices are low." and "They're no longer subject to the turbulent oil prices."
What can I say? Everyone has a view of the world including you.
Why don't I put it this way ... just incase the airlines didn't stockpile fuel, as you think they do, they should do another fare hike to cover the recent rise in fuel. $5-10 RT would do it.
I think last fall when Brent spiked (higher than today's price), the airline put through a fare increase to cover it. Don't think fares ever rolled back, but regardless, it might be a good time to sneak out another bump to fares before fuel drops again.
One good side to the "weather" hit to Q1 ... the comps for next year's Q1 could look good ... )
As far as the Ukraine goes ... have to see, but essentially agree you (iahphx). The EU didn't help this one, and maybe we should have learned from Georgia. A number of months before the Russians went into Georgia the Bush administration was asking the EU to admit the Ukraine and Georgia. Well, the EU didn't admit them and Russia moved, and we should have connected the dots about the Ukraine and been lobbying the EU over the last 5 years to do something with the Ukraine. If you move a dam, the water still stays on the other side unless you make sure there is another dam that replaces yours. We're disengaging all over the place, regardless of whether a new dam is place, and we haven't even pushed for a new dam to take our place anywhere. Now we're saying that Russia is apparently on the wrong side of history ... we'll see if that works ... ? I basically see this playing out like Georgia ... hopefully not worse.
It seemed like the airlines made it through the January storms, but there were more in February, which we all knew ... eventually, some airline was going to quantify it. Weather is weather ... not a real story changer. AAL was starting a pullback yesterday so we'll have to see where this "new, "old" news" will take it.
Despite fuel being up this year, it is still lower than last year in Q1. I noticed the Motley Fool article that said Q2 would be a tough comparison yoy because of fuel. The article really cherry picked comparisons. We don't know what fuel will be in Q2 yet, and since Q2 of last year, there have been some revenue initiatives/fare increases ... and as UAL pointed out this afternoon (as if they were surprised) Easter switches from March to April this year ... so Easter is in Q2.
A $9 gain between now and Dec., 2014 is not much at all? Sounds like close to a 30% annual return to me. It also sounds like you must have a list of other stocks that will do better over the next 10 months ... want to share your list?
Obviously the Win8 launch was awkward, but it wasn't Win8's fault ... actually those that use it like it. MSFT wanted it across all devices, and INTC just wasn't ready with chips for tablets and phones. So, I can see the public saying what's the point of Win8 for just laptops and desktops. However, Intel is ready with their tablet chips and MSFT has a lot more apps now (plus the PC applications) ... I think the tablet space is going to change for MSFT, as well as having the XP refresh adding to the benefit. People are going to like Win8 ... or eventually make a few more changes and call it Win9 ... whatever. If you have a win8 laptop or desktop ... you'll have a win8 tablet. An if you get a Win8 tablet, you'll upgrade your laptop, or desktop. INTC will get to phones soon ... maybe with 14NM, if not sooner. MSFT is the first across devices, and there's momentum building.
I'm sure many read the article from the last week that said because of the cash flow generators the airlines (legacies) are becoming, a new goal for the market caps should be revenues. Not a bad idea ... something to chew on over the weekend.
Obviously, meant $37.50 breakout range ... have another stock in the $34.50 range (probably reason for typo). Still the move down today initially was so obviously a gap filling.
" I believe the basis is not your basis, but the basis when you gift. "
The person/entity that you gift uses your cost basis when they sell the stock. But you use the current value of the stock to limit yourself to the $14K