American Airlines AAMRQTravis – you are the only one of whom I trust to ask this… Back when American Airlines was in bankruptcy, just a short year ago, AAMRQ was just laying around at 16 cents for any of us to pick up off the floor, I do not recall any pundits recommending we all bet the farm on it, or at least the back 40-acres. But here is it is now, AAL, at about 54 BUCKS a share, and now there are numerous highly-paid advisors recommending we buy the stock. I do not necessarily disagree with the current recommendations, but where were the pundits when the stock was a lowly 16 cents? My big question to you: were there any wise newsletter-writers recommending this stock when it was AAMRQ and still cheap? If so, who were these wise ones??? And are they still making recommendations for us today, or have they packed up their gains on AAMRQ and moved to sailboats and mega-yachts in the Caribbean?
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I never looked at American during the bankruptcy or immediately after, and I don’t remember seeing anyone touting the shares in bankruptcy — that is almost always a fool’s game, but it did work out this time. Somewhat reminiscent of Bill Ackman making a fortune on General Growth Properties by buying the equity for pennies with the argument that there was enough of an asset base to satisfy the creditors and reward the shareholders, and he was lampooned at the time for doing that — almost always, equity gets wiped out in bankruptcy because there’s nothing left after “fair” settlement with bondholders and other stakeholders, but sometimes it works out.
I don’t know what AAMRQ price was historically, but it looks like those who held before the settlements began last Winter ended up receiving about 3/4 of a share of AAL in total, worth something like $40 now. More recently, all the airlines have done spectacularly well over the last six months, particularly following the “ebola dip” last Fall (though AAL is up less than the other biggies during that time)
Pretty much right on, but I saw it as pure gambling and for me I about $1,000 pre-bankruptcy which is now around $14,000. I felt the brand and size of the fleet too much to pass up, that someone would pick it up because most of the time the greatest of the great are resurrected through bankruptcy. GM and Chrysler set the stage for it. It wasn’t a Pan Am type of thing. The American shareholders really got a heck of a deal for the risk and the drop in oil propelling the airlines now just added fuel, no pun intended, so pure luck has won out. The next best dice roll is when to get out.