Time to buy AMR Stock??

[lowpitchstop]

Seems like the wave is at the bottom and time to buy.. Oil is at $88

Who's in??

 

[AA717driver]

Yeah, if you don't like your money. AMR is a financial basket case. They've got just enough money to self-finance their DIP.

The operation is reminescent of UAL's "Summer of Love" in 2001. And, we're not even TRYING to slow down.

Scary stuff...

TC

 

[Flyby1206]

Im in if it drops below $3!

 

[Stifler's Mom]

"Never catch a falling knife."

http://itsjustmoney.blogs.com/its_just_money/2006/05/investor_mistak_1.html

 

[CitationLover]

Seems like the wave is at the bottom and time to buy.. Oil is at $88

Who's in??

I've got some calls to sell you.......

 

[satpak77]

Yeah, if you don't like your money. AMR is a financial basket case. They've got just enough money to self-finance their DIP.

The operation is reminescent of UAL's "Summer of Love" in 2001. And, we're not even TRYING to slow down.

Scary stuff...

TC

further discussion/expansion on this desired.....

 

[CitationLover]

further discussion/expansion on this desired.....

Think of it like this. Why isn't anyone BUYING AMR outright if they simply have $5 bn in "cash" (hint because it has 2x that in debt) for $1.25bn (its current market cap)? After all you'd be up $3.75bn.

Considering AMR is losing $2/sh this last quarter it can be argued the "real" stock price is about a buck.

In spite of all of this, I respect AMR management for not taking the easy way out so far that EVERY other major airline has done: file chapter 11.

 

[satpak77]

being a public university grad, and not Wharton/Harvard B-School, me wonders what magic dust is used by a company, which has historically lost money, came close to Ch.11, etc etc, and then they "find" money to order ??? hundreds of Boeings

 

[CitationLover]

being a public university grad, and not Wharton/Harvard B-School, me wonders what magic dust is used by a company, which has historically lost money, came close to Ch.11, etc etc, and then they "find" money to order ??? hundreds of Boeings

It's called 11.5 BILLION dollars IN DEBT, which AMR is. Bonds, bonds, bonds.

With the downgrade in US Debt though, its going to really hurt AMR.

Interest rates on treasuries will go up.
Banks will need to raise deposit rates to match t-bills.
Corporate bonds will need to raise rates to cover their spread on treasuries.

Thus AMR will pay more interest on any money loaned to them from their investment banks and their corporate bonds will now need to have higher rates to attract investors.

 

[satpak77]

interesting discussion. With AMR paying more interest on money, can they afford to pay that interest ? Are they going to finance this too ? Paying a credit card minimum payment with another credit card ?

Legit questions