ON AIR NOW

LISTEN NOW

Weather

cloudy-day Created with Sketch.
63°
Few Clouds
H 71° L 45°
  • cloudy-day Created with Sketch.
    63°
    Current Conditions
    Sunny. H 71° L 45°
  • clear-day Created with Sketch.
    72°
    Afternoon
    Sunny. H 71° L 45°
  • clear-day Created with Sketch.
    73°
    Evening
    Sunny. H 77° L 59°
LISTEN
PAUSE
ERROR

Krmg news on demand

00:00 | 00:00

LISTEN
PAUSE
ERROR

Krmg traffic on demand

00:00 | 00:00

LISTEN
PAUSE
ERROR

Krmg weather on demand

00:00 | 00:00

Local
What to do with your AMR stock after the bankruptcy
Close

What to do with your AMR stock after the bankruptcy

What to do with your AMR stock after the bankruptcy
Photo Credit: Rick Couri

What to do with your AMR stock after the bankruptcy

That was the question we were asked by text often the last couple of days. We went to the experts to find out an answer but it's not one stockholders will probably want to hear. "It's very rare that a chapter 11 bankruptcy filing salvages anything for the common shareholder" I was told by Jake Dollarhide of Longbow Asset Management.

During a conversation here at KRMG a question came up about buying AMR stock. We wondered if there was a way to actually make a little money before the company reorganizes? Jake says no, "you would have to buy new shares of the stock and take, most likely a total loss unless you sold out at .24 cents, .30 cents, .10 cents in the next several months."

For my entire conversation with Jake and a lot more in-depth analysis, click here.

So the stock is only good to line bird cages with for now but what about when the company comes out of bankruptcy, will they be a good buy?  "Quite possibly" Jake began. "They'll be playing on a more even playing field, be able to compete more evenly with Southwest and Jet Blue" he noted. But Jake said the bigger deal is how they can slug it out with some of the big players who have already been in bankruptcy multiple times and merged with others. "Frankly it's Continental/United that tookover the #1 spot from American and now the Delta/Northwest merger that's taken the #2 spot" Jake said. After their filings those companies had a lot of advantages "less debt, less historical cost" according to Jake.  And the #1 advantage is "they have better terms with their unions" was his quick response.

When I asked Jake how the new stock might be priced he told me it would be a guess to even comment. He did point out that some of the bigger companies came out of Chapter 11 with some pretty stiff prices. "G.M. priced I think at $34.00 a share, I wouldn't be surprised if they tried to price American similar if not higher, maybe $40.00 a share" Jake conjectured.

The answer is there isn't an easy answer. The best advice from Jake and just about every other financial expert,  just be careful and diversify your portfolio. In these difficult times, this isn't likely to be the last big company to file Chapter 11.

 

Read More
VIEW COMMENTS

There are no comments yet. Be the first to post your thoughts. or Register.

  • Saturday, funeral services were held in Tulsa, for Oklahoma State Rep. David Brumbaugh. He passed away last weekend due to an apparent heart attack. Friends, family and colleagues had nothing but good things to say about Brumbaugh. “Every time that he spoke, he did it not because of what he thought politically, but because it’s what he thought was right,” one colleague said.  “Hopefully, those of us that are still there will be able to follow that.” The service was held at Tulsa Bible Church.  During the service, Brumbaugh was remembered as a man dedicated to public service and to his faith.
  • A cashier is said to be in stable condition, after getting shot during an armed robbery Friday night. The shooting happened around 7:29 p.m., at the RK Food Mart on North Utica Avenue. “After the cashier cooperated and handed over an undisclosed amount of cash, the suspect shot him in the foot one time,” Tulsa police said.  “The victim was transported to a local hospital for treatment.” A description of the suspect hasn’t been released.   Anyone with information regarding the robbery is asked to call Crime Stoppers at 918-596-COPS.
  • The heavens opened up in and around the Tulsa area on Friday, but how much rain did we actually get? National Weather Service Meteorologist Robert Darby has the answer. “We did see wide-spread 3 to 4 inches across a large portion of northeast Oklahoma and Tulsa County,” Darby said.   There is a chance of rain in the forecast for Saturday as well.   Sapulpa suffered some damage in Friday’s storms.   While driving around, we found uprooted trees, a destroyed gazebo and one resident received quite the surprise when he woke up. “Getting my dogs ready to go outside and kind of noticed I had no roof towards the bathroom area,” the resident said.   Crews were out helping with the debris around the city.
  • United Airlines is apparently trying to make the 'bumping' process a little less confrontational. A United passenger tells People magazine that when he was checking in for his flight on the airline's website, a pop-up screen asked him if he would be interested in taking a different flight in exchange for a travel certificate of at least $200. A United spokesman says they've done it for years, but the passenger said he didn't see it on the United check-in he did a few days before. Whether it’s new or not, the airline is taking other steps to try to avoid the ugly situation where Dr. David Dao was dragged down the aisle of a plane. United also now has a rule in place that passengers cannot be bumped if they're already seated on their flight. You can read more about the story here.
  • A veteran firefighter died in the line of duty Thursday when he fell from the roof of a five-story apartment building while fighting a fire in New York City. >> Read more trending news William Tolley, 42, was critically injured while battling a 2-alarm fire in Queens on Thursday afternoon, the New York City Fire Department said. He was taken to Wyckoff Heights Medical Center, where he died of his injuries. He is survived by his wife, Marie, and his daughter, Isabella. “We lost another hero today,” Mayor Bill de Blasio said Thursday. “A man dedicated to protecting others gave his life to this work and, like all members of the FDNY, understood every single day that he was putting his life on the line, but he did it willingly in the service of others.” Firefighters were called around 2:20 p.m. to respond to a fire on the second floor of an apartment building on Putnam Avenue. Tolley was working on the roof with other firefighters to ventilate the building and protect higher floors when he fell, Fire Commissioner Daniel Nigro said. “It is a terrible tragedy for a department that’s certainly known more than its share of tragedies,” Nigro said. Authorities are investigating the circumstances that led to Tolley’s death. Tolley was with the New York City Fire Department for 14 years and most recently assigned to Ladder 135. He was also the drummer of Internal Bleeding, a well-known heavy metal band, The New York Times reported. Band members described Tolley as “the heartbeat of the band” in a Facebook post Thursday. “There are zero words to describe the loss,” the post said. “He was a good, decent and honorable man who loved his friends, his family and the people he served. There will never be another like him. There are no words to describe the utter sadness and despair we feel right now.” Tolley is the 1,147th member of the New York City Fire Department to die while serving the city, Nigro said.