N79969
Topic Author
Posts: 6605
Joined: Tue Jan 29, 2002 1:43 am

Shares Of UAL

Wed Dec 11, 2002 3:35 am

How is that they still have value at all? I thought shareholder equity is reduced to zero after a Ch. 11 filing.
 
 
N79969
Topic Author
Posts: 6605
Joined: Tue Jan 29, 2002 1:43 am

RE: Shares Of UAL

Wed Dec 11, 2002 11:42 pm


This must be a stumper. I really would love to know if anyone can answer....need to bring it back to the top.
 
N751PR
Posts: 1210
Joined: Thu May 09, 2002 6:06 am

RE: Shares Of UAL

Thu Dec 12, 2002 2:58 pm

Looks like its now my 2 shares on UA is now 2.42. I fell so rich now.
"Ladies and Gentlemen it's happy hour. You will get two approaches for the price of one."
 
United777
Posts: 2196
Joined: Wed May 19, 1999 8:04 am

RE: Shares Of UAL

Thu Dec 12, 2002 3:44 pm

As of right now UAL is at 1.21 and gained +.14 today in the market.
 
gigneil
Posts: 14133
Joined: Fri Nov 08, 2002 10:25 am

RE: Shares Of UAL

Thu Dec 12, 2002 3:45 pm

Chapter 11 does not automatically invalidate the stock. It can, but it doesn't automatically.

N
 
B747-437B
Posts: 8777
Joined: Thu May 30, 2002 6:54 am

RE: Shares Of UAL

Thu Dec 12, 2002 7:39 pm

Most of the gains are from speculators closing out their short positions. Many of them probably had triggers around the $1 mark, but the sheer volume of shorts closing was enough to bounce the price significantly. It will probably continue for a few more days and then show the expected decline.

UAL stock is worthless. Whatever way you look at it, there is no way they can emerge from Chapter 11 without either invalidating or severely diluting the equity.
"The A340-300 may boast a long range, but the A340 is underpowered" -- Robert Milton, CEO - Air Canada
 
Bizjets
Posts: 135
Joined: Sat Jun 25, 2005 5:11 pm

RE: Shares Of UAL

Thu Dec 12, 2002 7:44 pm

Ironically, when a company goes bankrupt,they're are people looking to buy shares. This is mostly SHORTS covering their positions. Like me.  Smile
 
N79969
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Joined: Tue Jan 29, 2002 1:43 am

RE: Shares Of UAL

Thu Dec 12, 2002 11:03 pm

Thanks for the responses. My follow up is then why is the price anything other than zero? If one shorts a stock, the price is driven down. I guess I don't understand the 'bounce' that is keeping the stock over zero.
 
B747-437B
Posts: 8777
Joined: Thu May 30, 2002 6:54 am

RE: Shares Of UAL

Thu Dec 12, 2002 11:46 pm

The bounce comes from people BUYING UAL to cover the short positions in their portfolio.

A short sale essentially sells stocks that you don't already own in the anticipation of the price falling. However, you eventually have to BUY the stock at that lower price to realize your profits and close out your position. This closeout buying is what is driving the stock up right now.
"The A340-300 may boast a long range, but the A340 is underpowered" -- Robert Milton, CEO - Air Canada
 
N79969
Topic Author
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Joined: Tue Jan 29, 2002 1:43 am

RE: Shares Of UAL

Fri Dec 13, 2002 12:36 am

-437B,

Thank you very much for that great explanation. That is tremendously helpful.
 
elal 744
Posts: 164
Joined: Wed Jun 21, 2000 1:19 pm

RE: Shares Of UAL

Fri Dec 13, 2002 5:13 am

Isn't it time for all of you who expressed so much confidence in United's resurection to buy in - while the stock is low?
Vercere bracis meis