This is an excerpt from an article I originally published on Seeking Alpha on November 30, 2011. Click here to read the entire piece.)
“Now we have the potential to overcome the last hurdle between us and lasting success, by achieving a competitive cost and capital structure.” – Tim Horton, Chairman, CEO, and President of AMR Corporation
On November 29, Tim Horton replaced Gerard Arpey as Chairman and CEO of AMR, parent company of American Airlines. Horton also replaced Arpey’s recent insistence that AMR would not file for bankruptcy with an official announcement of a voluntary filing for reorganization under Chapter 11 (see “AMR and American Airlines File for Chapter 11 Reorganization to Achieve Industry Competitiveness“). In a video message, Horton reassures the public that AMR will emerge from bankruptcy a much stronger airline now that the company can compete with the same advantages its competitors gained after going through bankruptcy procedures over the past 10 years…
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…I also cannot help but look back at the “bankruptcy panic” trade and appreciate the real risks inherent in such a trading strategy. {snip}…for almost two months many investors and traders were led to believe that AMR would not blow up, even as the stock eventually drifted downward to new all-time lows. In “On eve of bankruptcy, Wall St said hang on to AMR“, Reuters demonstrates that even the analyst community remained relatively complacent about the real risks…
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Source: FreeStockCharts.com
Be careful out there!
This is an excerpt from an article I originally published on Seeking Alpha on November 30, 2011. Click here to read the entire piece.)
Full disclosure: no positions