How low can they go!
06-25-2020, 12:21 PM
#51
Gets Weekends Off
Joined APC: Mar 2014
Posts: 774
Liquidity and demand, the only 2 things that should concern you for now. Oct 1st some of us might have bigger problems, but we need cash to survive, and demand to not furlough as deep.
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06-25-2020, 12:46 PM
#52
Gets Weekends Off
Joined APC: Sep 2016
Posts: 774
Originally Posted by stbloc
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.
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.
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