Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
NEWS FLASH!!!! Airlines are a business!!! Like it or not, they are in it to make money!!!!! One can dissect the complexity of ticket pricing, fees, and route structures into a million pieces and justify why we should or shouldn't merge. But the fact remains, an airlines survival is dependent upon making profits. Last I looked, we are still in a Capitalist society. What most fail to realize is that there are several factors involved. It's not a one-size-fits all solution. And that's where this issue is so easily one-sided. Why can't the DOJ stick it's business in areas where most citizens are affected, like the Pharmaceutical Industry, medical costs, and all the fleecing that the US government is well known for? Do you know how much a cotton swab costs in the ER? To sum it up, "airfares are more like Coca-Cola, says Rob Britton, a former American Airlines executive who now lectures at business schools. "How much does Coke cost? The reality is it depends on where you are. You pay a lot more at the cineplex than you do at the grocery store," he said. "Charge what the market will bear."
Oh and by the way ticket prices are lower today than ever before......these idiots need to do their homework before they start shooting off at the mouth...
WILL BE THE LARGEST AIRLINE IN THE WORLD, and will offer competition to the other 2 mega airlines already in existence
here we go IMO, there should be a quick climb to load up for tomorrow big earnings report. lets see it, come on baby,
everyone is jumping in for tomorrows big bump (IMO) looks like a great day
whats with that last hour dip? speculation? hedge-fund? day-traders?
i know we have all been anticipating the merger price potential. and i have heard/read stories that the new American is now so profitable that even if the new american went stand alone, the share would devalue down to about 3.50 -4.00 range for now. my question is, (it can drop down to 2.00 and i am still good) i just wanna know is their still the potential for old AMR stock to become worthless?
it seems IF the had to come up with a new exit plan (outside of US air) the new plan would have to pay old shareholders something, but just wanting a hazard estimate
21.00 for LLC is equal to 10.50 per share aamrq (with merger)?
anyone do the math, yet? i saw a chart that went higher, once, and i cant find again. plz repost.
The break down is as follows:
LCC = AAMRQ
$12 = $.94
$14 = $1.09
$16 = $2.80
$18 = $6.01
$19 = $8.76
$20 = $9.23
hoping for a 6.02 close (just a goal, not selling) or a dip to 5.75 where i buy more
wow, what a day. hey now that us air is above 20.00, does the "merge" payout formula have a potential payout for AAMRQ shares if it gets above a higher amount, say, 21.00?
LLC getting really close to 21.00 thats awesome, BTW, anyone know the exact dollar amount for LLC, that triggers next jump for AAG payout?
???????(Translation: We’re making history.) In Summer 2014, American Airlines plans to become the first airline to fly from Dallas/Fort Worth International Airport to Hong Kong and Shanghai! Which will you visit first? http://bit.ly/AA2Asia
AMR CorpOTCQB:AAMRQ
Industrials : Airlines
Change company Symbol lookup
Buy
Sell
Set TriggersView Option ChainSet AlertAdd to Watch List
$5.09 0.05 (0.99%) Bid
5.10
Ask
5.11
B/A Size
300x500
High
5.13
Low
5.00
Volume
1,878,975 (Light)
As of October 16, 2013 12:27pm ET
Summary
News
Charts
Earnings
Fundamentals
Valuation
Calendar
Analyst Reports
SEC Filings
Latest News Press Releases
Headline & BriefHeadlines Only
Judge Approves American's $785 Million Aircraft Financing Pact
12:24p ET October 16, 2013 (Dow Jones)
Judge Approves American's $785 Million Aircraft Financing Pact
By Joseph Checkler
NEW YORK--A judge on Wednesday approved up to $785 million in new aircraft financing for American Airlines parent AMR Corp. as the company continues to take advantage of historically low interest rates.
"This is a good business deal and a good opportunity given the rates available," said Judge Sean H. Lane of U.S. Bankruptcy Court in Manhattan in approving the deal. The financing is secured by 75 Boeing Co. (BA) jets of various sizes.
The exact interest rate for the financing won't be known until the bond deal is finalized, but AMR said annual interest rates on similar deals by other airlines have fallen to between 4% and 7%. In fact, AMR itself issued $1.4 billion in securities in a similar deal this past summer, with an interest rate of 4.95%.
The financing, some of the details of which were filed confidentially for competitive reasons, was supported by AMR's official committee of unsecured creditors.
AMR has continued to pursue advantageous financing as it prepares for an antitrust trial over its proposed merger with US Airways Group Inc. (LCC). The Justice Department back in August sued to block the merger, saying it would stifle competition and hurt consumers. A trial is set to begin in Washington next month.
Judge Lane last month approved the merger as part of AMR's plan to exit bankruptcy, but that plan can't become effective until the deal has regulatory approval. AMR and US Airways have said they are confident they can win the antitrust suit and merge, a deal that would create the world's largest airline.
The merger in its current form would repay AMR bondholders in full and give the company's existing shareholders at least 3.5% of the combined airline, a rare outcome in Chapter 11 cases.
In all, the proposal would give 72% of the combined airline to AMR shareholders, unsecured creditors, labor unions and some employees. The rest would go to US Air's shareholders.
AMR filed for bankruptcy protection in November 2011, citing the need to cut operational and labor costs. The company negotiated deep concessions from its main labor unions after a lengthy trial, cutting about $1 billion in annual labor costs.
AMR initially planned to exit bankruptcy as an independent airline, but the company eventually succumbed to the advances of suitor US Airways. The Justice Department suit threw both the merger and AMR's near future into uncertainty.
--Jacqueline Palank contributed to this article.
Stocks Hitting 52-Week Highs
10:36a ET October 15, 2013 (Benzinga)
VisionChina Media (NASDAQ: VISN) shares touched a new 52-week high of $12.62. VisionChina Media shares have jumped 111.14% over the past 52 weeks, while the S&P 500 index has gained 17.54% in the same period.
Synaptics (NASDAQ: SYNA) shares gained 2.23% to reach a new 52-week high of $50.45. Synaptics's PEG ratio is 1.11.
Wynn Resorts (NASDAQ: WYNN) shares touched a new 52-week high of $169.05. Wynn's trailing-twelve-month ROE is 205.90%.
US Airways Group (NYSE: LCC) shares created a new 52-week high of $20.82. US Airways' trailing-twelve-month revenue is $14.06 billion
the DOJ, cant "fund" their battles, let alone "pick" them. i think this gives them the saving face they need, bargain it away, blame it on the govt shut-down. even if they had a small argument they arnt going to have the resources to pull this off, its just burning resources, the delays are just dragging things out, burning money no one has. i am IMO thinking thursday late will be a little action (between earnings report, possible backroom deal, and maybe govt shutdown ends) crossing fingers
Settlement in the works??
At the request of the Special Master, the Court is extending by two business days the deadline for the parties to provide the Court with a Joint Trial Procedures Order. Accordingly, the Court requests that the parties file their Joint Trial Procedures Order by no later than 5:00 PM on OCTOBER 17, 2013. Signed by Judge Colleen Kollar-Kotelly on October 15, 2013. Less
Sentiment: Strong Buy
Sort: Newest | Oldest | Most Replied Collapse all replies
fishnett • 2 hours 5 minutes ago
0users liked this postsusers disliked this posts0Reply
Strange.
Yesterday Airlines said they wont appeal discovery ruling by special master
Today, they push back deadline
I have no idea what it means....
1 Reply to fishnett
arcticfax • 1 hour 2 minutes ago
0users liked this postsusers disliked this posts0Reply
Fish...It would be consistent with a "deal in the works"....
That is my bet anyways....
Long and strong..!
LLC is 20.72 (great news) solidly above 20 dollar mark, aamrq still dipping, expecting to see folks buying back in now.
yea, i know the feeling, i was getting (impatient) bored waiting, and thought i would day trade the dips,for fun (hot potato hot potato) but patience and DD are ussually the smarter move
happy to adjust to my 9.23 pps, will most likely hold out for 11.00. holding airline stock for a couple of years for it to hit the 20-27 dollar price is too stressful for amateur like me
ok, these .50 swings are killing me, i know i am hanging strong, i have been doing DD daily, and nothing but good news, so i am hoping this is just the govt "shut down" catching up. but ready for this green swing before closing. anyone hearing anything? good or bad
well, i have been trying to catch a dip since 4's. and just missing them. been playing .45 below previous days close. and caught it today. while i like the steady climbers, at least i got a few more shares today on the dip just under 5.00. these are some big dips and rebounds though, mercy, do alot of "penny" stocks or Q stocks do this.?
been wanting to add more shares (chasing the dragon up for a change) havent been able to catch a dip, it just keeps going up, (certainly not complaining) but any guesses on time , for a dip?
whenever it posted, it was a sizable bump in price
UPDATE FROM ANTITRUST COURT
APFA is pleased to report that the Court in the DOJ antitrust lawsuit today ruled that the case will proceed on its expedited schedule despite the government shutdown. Early this morning, the DOJ had filed a motion to stay the case because of the lapse in appropriations. This afternoon, however, the Court denied the motion, highlighting that “particularly employees” of both American and US Airways have a “vested interest in the adjudication of this case without delay.”
ready to double down at 4.00
been a rough couple of days,
LLC at 19.33 so close to the 20.00 mile marker, and that is before any good news, AMR climbing steady, was gonna sell at 5.00, but with the 9 plus dollar guarantee (if LLC breaks 20, assuming the merge) guess i will hold out for the gamble. hoping for a back room negotiation, i won't make it to Nov./ Dec..
wow, taking off, someone knows something, and LLC jumping too
thanks for info. and reassurance, i feel the same way on everything your saying, but its still nice to have the peace of mind, that we are all on the same page
IMO the other airlines wouldnt be happy with "opening the books" to the intimate details of their accounting. as well as sounding like an expensive under taking for the DOJ. this really really really needs to go thru
http://www.avafin.com/articles/1026433.html
lots of info out there, getting excited about news (impatient too)
even LLC (USAIR) is withing a dollar of a huge milestone, and the good news isnt even out yet,
WASHINGTON (TheStreet) -- Employees of US Airways (LCC_) and American (AAMRQ) blitzed Washington in support of a planned merger, which a veteran antitrust attorney said is unprecedented.
"Antitrust attorneys are always fond of saying that political pressure is never effective when it comes to mergers and antitrust, and that sometimes it can backfire," said John Briggs, a veteran Washington antitrust attorney, in an interview. Briggs is co-chair of Axinn Veltrop & Harkrider's Antitrust Group and managing partner of the firm's Washington, D.C. office.
"I've been doing this for four decades," Briggs said. "I've never seen the parties to a deal put together a rally on Capitol Hill. I've never heard of such a thing. They've got unions, companies, Democrats, Republicans -- it's bizarre.
"Will it make a difference? Maybe it could. It's got to make the Department of Justice uncomfortable. They're right down the street. The attorney general will know about it," he added.
James Ray, spokesman for the US Airline Pilots Association, said he was part of a group of union leaders that met with an undersecretary of labor. Laura Glading, president of the Association of Professional Flight Attendants, was part of a group that met with Bill Baer, who heads the Justice Department's antitrust division. The department announced Aug. 13 that it will oppose the merger in a U.S. District Court case, now slated to be heard beginning Nov. 25.
On Wednesday afternoon, about 350 employees gathered for a rally outside the U.S. Capitol building. Five members of Congress from North Carolina, Pennsylvania and Texas spoke in support of the merger, as did a half-dozen union leaders. "It was a beautiful day with perfect blue skies and all of us from two companies coming together with one goal in mind: Let us compete together," said US Airways spokeswoman Michelle Mohr. "We were just getting our voices out there."
At the rally, Glading described a 45-minute meeting between union leaders, Baer, and a deputy attorney general. "We talked about why this merger makes sense for us. How invested these employees are. How for the first time we felt hope, and now this hope can be dashed," Glading said. "They were very very attentive, they asked a lot of questions, and I think it was a great opportunity for us to get our stories out, because it's our story that got us here today."
Besides the rally, employees called on members of Congress and the Senate. The goal was to call on every member. Ray said he was part of a four-member team that called on about 15 members of Congress over two days. Most meetings involved congressional staff, but U.S. Rep. Richard Hudson, R.-North Carolina, met with the group. "He is on board," Ray said.
Briggs said the labor involvement may have an impact, given that labor backed President Obama in two elections. "It took a lot of union negotiations to make this (merger) happen," Briggs said. "The CEO of US Airways is using some unorthodox strategies."
Briggs said he was surprised that the Justice Department opposed the merger. It wasn't just the airline industry that was caught napping. "The antitrust was leading the charge saying this is going to happen -- that was the unanimous view," he said.
In its surprise announcement that it would oppose the merger, the Justice Department "seemed to be looking mournfully at their own past approval of (similar) deals" involving Delta (DAL_) and United (UAL_), Briggs said. "But (both sides) have their stories to tell.
"The government is right that the airline industry is a mess; competition is not what it could be," he said. "The airlines are right that (DOJ) is changing the game here. Every other deal has been looked at through different eyeglasses. But there's always one deal too many. There's always a deal that can't get done."
Asked about the possibility of a settlement, Briggs said that raising the unusual issue of competition on one-stop routes in the DOJ's complaint appears to preclude one, since a deal is difficult to imagine, but he noted that Judge Colleen Kollar-Kotelly apparently wants one. "Judges who set things for Thanksgiving and Christmas and New Year's always want to settle," he said.
All or nothing
Unlike other major carriers, whose share prices' development over time reflects various energy, economic, and industry factors, AMR shares will be made or broken by the result of the merger negotiations and lawsuit. Due to American Airlines' bankruptcy, creditors must be paid before shareholders as the airline restructures. In most bankruptcies, especially those for airlines, common shareholders receive nothing, since there are not enough funds to even pay creditors in full. The merger with US Airways calls for AMR stakeholders to receive shares in the new merged entity (American Airlines Group, or AAG), however, with some AAG shares even going to AMR common shareholders.
Under the merger plan, AMR common shareholders would receive 3.5% of AAG, and begin to receive substantially more as US Airways shares rise above $14.99. Based on the values given in the AMR bankruptcy plan, AMR shares would be worth the following amounts using the figures in the AMR bankruptcy documents divided by a share count of 335.5 million..
US Airways share price Value of AMR shares upon conversion
$12 $0.94
$14 $1.09
$16 $2.80
$18 $6.01
$20 $9.23
Source: U.S. bankruptcy court documents.
The value of AMR shares depends on a successful merger with US Airways, since it's virtually the only way AMR common shareholders could receive anything. The DOJ lawsuit threw this merger into question by not only reducing the odds of such a payoff, but also by sending US Airways shares down, making potential investors' balance of risk and reward less enticing.
Could it pay off?
Right now, AMR shares have taken an understandable beating. With the merger now up in the air (no pun intended), the risk of an investment in AMR has skyrocketed. At the same time, many traders who saw an arbitrage play on the merger have run for the hills; they came to play on a slight merger pricing discrepancy, not to speculate on airline lawsuit battles.
If investors hope to reasonably extract any value from AMR shares, they'll need to see the merger approved in the end. Many analysts still expect this to happen, and consider the DOJ's lawsuit a negotiation tactic. If this is the case, the main effect of the lawsuit will be to delay the merger, not to stop it.
Despite much carping from the airlines about how the merger's delay will hurt them financially, this is where AMR shareholders could see potential gains. Since AMR shares rise faster in value as US Airways shares gain, they represent a leveraged play on US Airways. That leverage has an expiration date, however: the day the merger is completed or denied.
At the same time, if the merger is approved, the market will likely see such a development as a positive for US Airways and the industry as a whole. Indeed, the market severely punished airline stocks when the lawsuit threw the merger into question. And by completing the merger, this integration would continue the narrative of airlines as an increasingly consolidated industry, where fewer competitors means less competition.
In the meantime, Delta Air Lines (NYSE: DAL), which completed its merger with Northwest Airlines in 2008, has been impressing investors lately. After finishing its integration, Delta has slashed net debt, reinstated a dividend, and been included in the S&P 500 as only the second airline in the index (the other being Southwest Airlines making Delta the only legacy carrier in the S&P 500).
But there could be more to come for Delta if this latest merger is approved. As the traditionally ultra-competitive airline industry shrinks to a few major carriers, airlines get greater pricing power, allowing them to more easily raise fares and fees. While consumers are rarely in favor of paying more for plane tickets, from an airline's perspective the merger is a clear positive for the bottom line.
Although the US Airways/AMR merger is still in question, the impression of today's airlines as more stable and profitable than those of the past has fueled a general uptrend in airline stocks. Had the merger simply have been allowed to go through, AMR shares would be converted into US Airways shares a lot sooner.
However, the delay in the merger has extended the time until the AMR shares would convert -- if the merger succeeds at all. Since AMR shares are a leveraged play on US Airways shares, this delay effectively gives AMR shareholders more time to have leverage over US Airways stock.
Temporary pain for later gain?
AMR shareholders must have been disappointed to see the DOJ file a lawsuit against the airlines' merger. While there is still a very real possibility that the merger will ultimately fail and AMR shareholders will not see a dime after the bankruptcy restructuring, if the merger does prevail then AMR shares could be significantly more valuable. The delay means that US Airways shares will have more time to rise or fall before the merger is approved or denied. Any significant rise that happens in that time could cause AMR shares to more than double if the merger is approved, or leave shareholders penniless if it's denied.
None of this is for certain, of course, but we do know that this merger battle is far from over. The possibilities of losing everything or seeing multibagger returns definitely make this a speculative investment. And with this type of investment, you should always gather as much information as possible, and only use money you can afford to lose.