Cav ... My options statement was really a question ... and I hate gaps (AAL only has a few days of trading history in the strict sense, not considering LCC ... do gaps even matter this early on? However, the $28s sound reasonable ... but I was more throwing stuff out there as questions than any prediction.
I'd prefer it to go just straight up.
I'm optimistic, but there are two gaps below this level. One is today's and the other is in the low $25s (though that was a higher volume day). That said with options this Friday, doesn't max pain look about $25?
I always felt LCC would do well ... this is so much better. Just a new time for airlines.
The talking shirts only started getting positive on the airline industry last spring ... the word has yet to spread widely.
Now the guy who wrote the Seeking Alpha article is bullish ... and that is an understatement.
If people start seeing that potential in AAL ... $4 billion plus in earnings in 2015 (close to that in 2014, ex some merger expenses) ... it'll have a hard time going down regardless of the conversion period.
Not only did he paint good earnings (LCC did also in their prospectus), but the Seeking Alpha article talked about some pretty good multiples as well ... and here I was going to be happy with just an industry average multiple given that AAL has a lagging multiple. Good earnings and an expanding multiple ... what else can you ask for in a stock?
"why would debt holders care?"
I agree that from the standpoint of being made whole, the conversion price doesn't matter to the creditors, but the lower the price per share, the more shares they get and those shares would have "more" potential. How they would manipulate the conversion price is beyond me (if they can), but if I were a creditor, I would prefer a lower share price to get more shares.
Old LCC shareholders don't have a horse in this conversion race, but have to put up with gyrations, if any, for the time being. Their position will only be impacted temporarily, and not permanently as the position of the creditors and aamrq holders will be by the level of the conversion price.
What happens to share price during the conversion periods is everything to the AAMRQ holders.
This stock has potential ... so ... we'll see what happens.
FAQ from Investor Relations AAL ... I'd look at the S-4 and BK docs referenced as well ..
"The U.S. federal income tax consequences of the merger to holders of US Airways stock are disclosed in the Form S-4 filed by AMR Corporation with the SEC in connection with the merger, and the U.S. federal income tax consequences of the confirmed chapter 11 plan to holders of AMR Corporation stock are disclosed in the Disclosure Statement dated June 5, 2013. To briefly summarize the disclosures therein, holders of US Airways stock or AMR Corporation stock generally will not recognize gain or loss for U.S. federal income tax purposes as a result of the exchange of such stock for American Airlines Group stock in the merger or pursuant to the chapter 11 plan, respectively, although holders of AMR Corporation stock may have imputed interest income with respect to American Airlines Group stock received after the effective date of the chapter 11 plan. All holders are urged to consult their tax advisors."
This is essentially a very unusual BK ... I bet your broker, or who ever you talked to, doesn't have the specifics of the deal in front of him. AAL has the info on what you had and will, in time (distribution periods), grant you your shares depending on the price of AAL, and terms of the merger agreement.
Meanwhile you can wait or try to talk to someone else at the broker, or have them look into it.
I don't think a 9 to and 11 PE is too greedy to expect ... and I assume that the $3.52 is an after-tax eps figure and it should be over $5/share to compare to DAL and UAL ... which seems crazy, so maybe I'm nuts.
apkagk ... that $23.48 was after the discount? I thought it was just the VWAP ... but, guess you said "after" ... thanks. I can use that price to figure the amount of AALCP shares that have to go through conversion.
I know of the 6.25% conversion chart and the ratio for formula for AALCP to AAL ... just was wondering what was used to get the number of shares of AALCP.
Junk ... I believe you had $7.67 billion for the creditor and labor claims after the VWAP discount. Was the VWAP used on the effective date $23.48? If so, the amount of AALCP outstanding should be about 326 million shares ... is that what you would get?
YHOO key statistics give 335 million shares (don't know if that is right (where it came from). Otherwise, wasn't it the creditor and labor amount divided by $23.48 (and was the $23.48 the VWAP used before the effective date?)
I still don't know how you can assume that. My trades are always broken up into many pieces for the block I trade, and don't see why it isn't the same for larger blocks.
I don't know how you can tell that 100 to 500 share blocks aren't just part of much larger blocks pieced out and sold at various decimals of the bid-ask.