Airline Pilot Central Forums - How low can they go!

Quote:

Originally Posted by stbloc (Post 3080470)

You understand diluting the stock is a last resort for most companies. No shareholder benefits from this and usually makes it a non investable investment. It shows how desperate they are by wiping out the market value of the company. The “skin” you speak of just kicks the can further down the road hoping for a miracle vaccine. What scares me the most is Doug lack of transparency about what’s going on. Other carriers CEO’s are very public while mums the word at AA.

I ment good news another poster agree some of the borrowing is to service debt, not create new debt.

Some of it is kicking the can, and some of it is changing their liquidity policy. The fastest way to stop living paycheck to paycheck is to borrow 2 months of expenses on a five year loan and deposit it into your checking account.

Airlines were running to lean working their capital to hard, free change fees or cancellations compounded the problem.

I do think the banks want the stakeholders equity diluted, it shows commitment when they have to raise capital at their own expense.

Buffet saw it coming or trades inside, he took a loss to sell for cash, instead of the same loss through diluting his stake.