juanchie
Posts: 188
Joined: Thu Jan 29, 2004 7:17 am

DAL/US Stocks

Tue Jun 08, 2004 5:36 am

With Delta and Us Airways contemplating bankrupcy, what happens to stock people own. For instance, say I own 1000$ in DAL stock, If they go bankrupt, what happens?



Juan Carlos
God, forgive me for who I am, and help me be the man I want to be.
 
FlyPNS1
Posts: 5258
Joined: Wed Dec 01, 1999 7:12 am

RE: DAL/US Stocks

Tue Jun 08, 2004 5:48 am

If DL goes BK, in all probability the stock will be worth nothing.

That's exactly what happend to US when they went BK the first time. Anyone holding common US stock got squat. US is now trading again, however that is newly reissued stock.



 
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mariner
Posts: 18092
Joined: Fri Nov 23, 2001 7:29 am

RE: DAL/US Stocks

Tue Jun 08, 2004 5:50 am

Even though the airline declares Chapter 7, the stock may not be cancelled - immediately.

In the case of UAL, it was delisted from the main board but continues to trade "over the counter" with the new symbol "UALAQ" - at a severely discounted price.

A few gamblers have made a bit of money from it, by trading it within its very limited price range.

However, UAL has advised that the stock will probably be cancelled when UAL emerges from bk.

In which case, all investors have lost any money they put into it.

No airline that have declared bk and emerged wants to carry the dead weight of the previous shares. They want to start afresh.

cheers

mariner
aeternum nauta
 
starrion
Posts: 969
Joined: Sat Jul 19, 2003 1:19 pm

RE: DAL/US Stocks

Tue Jun 08, 2004 5:50 am

Depends on how the bankruptcy is discharged. In most cases the common stock is simply canceled when the company comes out of protection. So your $1000 in stock becomes $0. That's what happened to me when Worldcom went down. I don't think Delta is going to escape ch11 which is why I dumped all my shares in Delta a few weeks ago. I had been planning to hold it long term as I am sure Delta will survive, but if the pilots force them into Ch 11 by not negotiating on their contract then I likely would have gotten as badly screwed as they're going to be.

Thankfully a last minute bounce allow me to clear a healthy profit on the deal but I would be wary of buying DAL -unless- you can afford to lose your investment.
Knowledge Replaces Fear
 
ouboy79
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RE: DAL/US Stocks

Tue Jun 08, 2004 6:12 am

I sold most of my U stock (US Airways on the NYSE) before their Ch11 filing but kept the original 10 that I had received when I turned 13. They were more sentimental than anything. However, in a Ch.11 filing it is up in the air on whether or not the stock will be zapped. With a Delta filing, it may not happen as they'll go in with a pre-packaged filing just to zap the pilots and some other contracts (all other employees are non-union and already down to a level the airline wants). US Airways I would expect their shares to survive this next filing as well. As stated previously...UAL is going to get cancelled out (already warned of this) and they'll find themselves like US Airways...with a new symbol sitting on the NASDAQ for a few years. If both carriers survive 5 years and trade at an acceptable level, they'll probably be welcomed back to the NYSE. I know US Airways is having their old ticker symbol "U" held for them by the NYSE.
 
ualonghaul
Posts: 221
Joined: Fri Jun 04, 2004 1:41 pm

RE: DAL/US Stocks

Tue Jun 08, 2004 6:41 am

If the organization is acquired when they go bankrupt, (much like UAL was) the stock will most likley be knocked down to an over the counter (OTC) exchange. You will notice the United stock (now UALAQ) had this happend. These stocks will still change hands somewhat, but will be worth zilch when the company decides to can the common stock program. If you own anything now, your best bet is to get rid of it before it hits the trading or value thresholds that will force it into a OTC market.

I think UAL had a press release or something that stated the UALAQ stock will be worth nothing effective xxx date.
 
iowaman
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RE: DAL/US Stocks

Tue Jun 08, 2004 6:42 am

How is F9 stock? Will that be worth zip in a few months?
 
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mariner
Posts: 18092
Joined: Fri Nov 23, 2001 7:29 am

RE: DAL/US Stocks

Tue Jun 08, 2004 7:22 am

Iowaman:

Why would F9 stock (FRNT) be worth zip?

The airline reported a profit for the fiancial year, one of the very few airlines to do so.

This coming year? They told Congress that - because of the high price of oil - profit/loss this year is "too close too call."

They have good money in the bank, their revenue passenger miles are increasing every month, and they are in high growth mode.

The stock never fell below about $8.50 even at the worst of the oil price days, and has since rebounded to about $9.70.

cheers

mariner
aeternum nauta

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