Originally Posted by
stbloc
correction I was wrong I looked it up and they received 3 pennies on the dollar. But the stock was wiped out as it always does in bankruptcy regardless if it’s a 7 or 11. So does AAL have value if they file? you be the judge. If you buy the stock today at $12 and they file mostly won’t receive one cent. Now if you want to buy it in bankruptcy when the ticker will be AALQ you do have a chance to make money like the example you provided above. That’s a very different scenario then the common shareholder who bought AMR vs AMRQ.
Yes. Totally wrong:
During bankruptcy, American’s old stock dropped to as low as 26 cents after the company filed for bankruptcy in November 2011. By the time the merger closed in December, the price had reached as high as $13.50.
Shares of the combined American Airlines and US Airways are up more than 50 percent since the merger closed. American’s stock closed down 37 cents Thursday at $37.34 a share.
On Wednesday, JPMorgan Chase analyst Jamie Baker estimated that the final value of old AMR shares, which last traded Dec. 6 at $11.39, could be $28.19 once the final stock distribution occurs.
Wall Street analysts say American’s current stock price could drop in the short term as creditors and unions sell shares to lock in profits.
“Given no change to our unrelenting bullishness as to the post-takeover earnings prospects of AAL, we would recommend investors exploit any unexpected pull-back related to the Day 120 equity conversion,” Baker told investors
Read more here:
https://www.star-telegram.com/news/b...#storylink=cpy
Don’t get me wrong, I’m not recommending investing in companies facing bankruptcy, but you asked for an example and you got one.