United Capital speculation

[contrail67]

Possible aircraft announcement???...not sure what may be in the works.


NEW YORK (AP) — A JPMorgan analyst on Friday upgraded shares of United Airlines' parent UAL Corp. all the way to "Overweight" from "Underweight," suggesting investors buy up shares before an expected capital plan is announced next week.

 

[~~~^~~~]

Interesting. Jamie Baker appears to be advising that UAUA is "not dead yet." He certainly isn't writing about profits, but thinks that United can pile on some more debt, or unlock some more shareholder value.

Those are not reasons that compel me to go buy stock.

NEW YORK (MarketWatch) -- The parent company of United Airlines, UAL Corp., may be on the road to bankruptcy, but not at the accelerated pace suggested in its recent stock price, said J.P. Morgan analyst Jamie Baker on Friday. In a note to investors, Baker raised his rating on UAL to overweight from underweight. "United shares have fallen too fast and furiously, implying a higher risk of near-term bankruptcy than justified," Baker wrote. "While not for the meek, we strongly recommend purchase of shares in advance of next week's conference call, which may be accompanied by significant capital announcements." UAL doesn't appear to be at risk from Chapter 11 until 2009, and only if management ignores capital opportunities at its disposal, Baker added.

 

[Secret Squirrel]

Yea, more debt is exactly what will make United better.

 

[contrail67]

Yea, more debt is exactly what will make United better.

Just speculation and sometimes a company will aquire debt to make a profit, or increase the chance to. Kinda like a person taking out a business loan...debt...to start a Papa Johns. How terrible of an idea.

This could be a cash building plan too...probably more likely.

I guess you could call JP Morgan and the folks on Wall Street or better off United and tell them what a terrible idea this might be. Sure they will listen.

No matter how you look at it...Building Capital or cash balances is positive if it happens.

 

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Duplicate post...

Good luck to United employees. Life with the McKinsey Consultants running the place has been tough.

 

[Colonel Savage]

Amazing the speculation a little $15 drop in oil prices will cause.

 

[amF16]

By capital opportunities, I think he is talking about raising money(capital) by selling assets, (ie frequent flyer program, int routes, training center). Not buying airplanes that will increase liabilities.

 

[D-Bo]

By capital opportunities, I think he is talking about raising money(capital) by selling assets, (ie frequent flyer program, int routes, training center).

Probably more like you hope that's what he meant.

 

[amF16]

Probably more like you hope that's what he meant.

Sorry for trying to inject some common sense into the thread. I'm sure that a company that is announcing the grounding 737s and 747s because they are losing money on those planes, is planning to spend money on new planes. So they can fly around them at a loss too.

 

[D-Bo]

Sorry for trying to inject some common sense into the thread. I'm sure that a company that is announcing the grounding 737s and 747s because they are losing money on those planes, is planning to spend money on new planes. So they can fly around them at a loss too.

Go back and read what you typed in your first reply. You said "I think he is talking about". Quote what he said that gave you the idea. Otherwise, it's only your personal opinion. Which, in that case, you should have just said "what I think".

 

[amF16]

Go back and read what you typed in your first reply. You said "I think he is talking about". Quote what he said that gave you the idea. Otherwise, it's only your personal opinion. Which, in that case, you should have just said "what I think".

"UAL doesn't appear to be at risk from Chapter 11 until 2009, and only if management ignores capital opportunities at its disposal, Baker added."

Capital opportunities....raising capital(ie cash) not capital expenditures. Why would spending money help stave off bankruptcy.

 

[frog_flyer]

Jamie Baker is probably the only analyst that has a clue. You'll notice that his estimates are usually much more pessimistic than consensus.

His reports are pretty hilarious; definitely get your hands on one if you can.
​

 

[D-Bo]

"UAL doesn't appear to be at risk from Chapter 11 until 2009, and only if management ignores capital opportunities at its disposal, Baker added."

Capital opportunities....raising capital(ie cash) not capital expenditures. Why would spending money help stave off bankruptcy.

I'm sure that why he changed his opinion of the stock to outperform. But, go back to my previous post and tell me where I said I disagreed with what you said. I was making a point that if interpret what someone is thinking, you should quote them. Otherwise it's personal opinion.

But to your point, while UAL management was in their quest to hide money, they paid down 2.5 Billion in debt. While hiding money from the employees, they Fd themselves in the end. So UAL is far from completely leveraged even though the idiots running this joint would now have to borrow against the equity created by paying down that debt, at a high percentage.

So, these MF crooks still owe me some money and I want it right now.

 

[Secret Squirrel]

Just speculation and sometimes a company will aquire debt to make a profit, or increase the chance to. Kinda like a person taking out a business loan...debt...to start a Papa Johns. How terrible of an idea.

This could be a cash building plan too...probably more likely.

I guess you could call JP Morgan and the folks on Wall Street or better off United and tell them what a terrible idea this might be. Sure they will listen.

No matter how you look at it...Building Capital or cash balances is positive if it happens.

Yea, successful companies. Not companies that are scheduled to loose $8-20 per share (about 1-3 billion dollars) this year. Their capital plan could be to cash out assets, sell off anything worth money and call it a day. In other words return capital to the share holders before there is nothing left mortgage. I do not hope this is true but be very careful. What is good for the stock holder is not always good for the employee. Good luck to all UAL employees.

 

[amF16]

Moody's cuts UAL debt ratings deeper into junk

Fri Jul 18, 2008 5:19pm EDT
NEW YORK, July 18 (Reuters) - Moody's Investors Service on Friday cut its ratings on UAL Corp (UAUA.O: Quote, Profile, Research, Stock Buzz), the parent of United Airlines, saying high fuel prices and a worsening economy is likely to result in negative free cash flows in the near term.
"As non-fuel operating costs for United are somewhat higher than peers, partly due to the fleet age and the overhead from an extensive route network, when combined with the unprecedented fuel costs, negative free cash flow at the airline is likely over the near term," Moody's said in a statement.
The cumulative effect of negative cash flow and net losses over time is a worsening UAL credit profile, Moody's said.
Moody's cut UAL's corporate family rating two notches to "Caa1," seven steps below investment grade at "B2." The ratings outlook is negative, indicating the likely direction of the rating over the next 12 to 18 months.
UAL has adequate liquidity, with around $2.7 billion to $2.8 billion in cash last time it disclosed its position, and before actions to increase its liquidity, Moody's added. The airline also has a meaningful level of assets, such as aircraft, which could be used to raise additional cash, it said.
The company's ability to sustain its liquidity, however, could be pressured over the coming year due to costs from reducing its work force, Moody's added. (Reporting by Karen Brettell; editing by Gary Crosse)