The AMR Bankruptcy Trade Has Run Its Course For Now

This is an excerpt from an article I originally published on Seeking Alpha. Click here to read the entire piece.)

This morning (October 12), I sold my shares in AMR Corporation (AMR), owner of American Airlines. As I explained October 4, AMR was a trade on bankruptcy panic where sellers dump shares first and ask questions later. I was slow on the trade and “only” managed a 12% gain on the trade. From the bottom to my selling point, AMR gained 57%. I will be faster and more aggressive on similar bankruptcy fear plays in the future. {snip}


AMR has recovered most of its losses from its day of bankruptcy panic
AMR has recovered most of its losses from its day of bankruptcy panic

Source: freestockcharts.com

I still believe that AMR holds the potential for tremendous upside if it avoids bankruptcy, but an article I read in SmarterTravel reminded me that bankruptcy could still be a viable business option for AMR. In “American: Bankruptcy … Then Merger?“, author Ed Perkins makes the following claims:

{snip}

If such a deal happens, I will definitely be a buyer on the other side of the bankruptcy process.

Be careful out there!

This is an excerpt from an article I originally published on Seeking Alpha. Click here to read the entire piece.)

Full disclosure: no positions

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