Surely he sold long ago?
What is odd is that in 2003. per the quoted post, FWAAA was suggesting that the employees buy the company then as it appears he is suggesting now.
Quite right, I sold my AMR long ago (in 2006-07 at prices ranging from about $30 to $40 on both sides of its $41 peak).
And yes, I stand by my 2003 assertions that employees willing to "invest" huge paycuts in their employer with very limited upside potential (just 400 and some options) should have been willing to invest some real money on the side to capture some of that upside for themselves. 3,000 shares at the $5/sh price on May 1, 2003 when the concessions were jammed down your throat were worth $120k in January, 2007.
For many nonpilot employees, that would have more than covered their paycuts for those 44 months (5/03 to 1/07). As Owens pointed out repeatedly in 2003 and beyond, the stock would have had to reach $200/sh or $300/sh for those piddly "we're sorry for misleading you" options to make up your concession losses. Well, it only had to reach $41/sh if you'd gambled another $15k on AMR stock on concessions day (May 1, 2003) to more than make up your concession losses. And if you'd been an optimisic gambler, you could have bought earlier in March or April for closer to $2/sh, making your 3000 share investment just $6,000 or so. At one point, AMR was trading for $1.25/sh.
Employees buy the company now? Honestly, I think it's too late. The stock is less than $2/sh again, but I'm not buying and I can't imagine anyone who's thinking rationally wanting to buy AMR stock now. Common stock becomes worthless (it's canceled) in Ch 11 and the creditors get the new stock, not the people who owned the old stock. For years after the 2003 concessions, many employee posters on this website posted repeatedly that AA would file Ch 11 anyway despite the huge concessions. Up to now, they were wrong. Arpey and the board have an honest objection to bankruptcy. But it looks like a Ch 11 filing is gonna happen. When that happens, you don't want to be a stockholder.
What about buying the entire company and preventing a bankruptcy filing? Again, I honestly think it's too late. In the past 8.5 years, AA burned a lot of furniture and sold off a lot of noncore assets (hotwire, orbitz and others). AA sold a couple billion dollars of new stock (to new suckers) and borrowed a few billion dollars worth of debt (again, from suckers) to pay the $30 billion extra in fuel expenses since the concessions (compared to what fuel would have cost at 2002 prices). There aren't any more unencumbered assets to borrow against. There aren't any more noncore assets to sell off to raise cash, just the family jewels like LHR and NRT and South America.
Not to answer for comatose, but I think he wants your opinion on emlpoyee purchase of the company.
At least I would be interested in your views on that myself.
If I thought there was any chance at all that 2003 would repeat itself, I'd be buying lots of AMR again. But I think the odds that the employees would suffer concessions all over again outside Ch 11 are closer to one in a million this time. And I don't like those odds. Powerball or Megamillions tickets look like just as safe a bet to me as does AMR stock right now. Oh, sure, if you have a few dollars burning a hole in your pocket and you were gonna blow it in Las Vegas anyway, go ahead and buy some AMR now on that one in a million chance that lightning strikes a second time.
The only way I see it happening again is if jet fuel drops to a dollar a gallon early next year and stays there for a few years. That would cut nearly $6 billion from AMR's fuel costs (compared to 2011), negating any need for concessions. UA and DL would earn even higher profits than AMR would (thanks to their much lower costs) but their outsized profits would cause their employee labor expenses to more quickly rise to match or exceed AA's employee costs. Good times would return. What are the odds of $1/gal jet fuel? Yep, not likely. Since the concessions, AMR has spent $50 billion on fuel (thru the end of this year) compared to $20 billion - what fuel would have cost at 2002's prices. That $30 billion of unforeseen expenses is what has helped to kill AA. Sure, the employees gave $1.0 billion in annual paycuts (plus another $800 million in job cuts), but that $8 billion in paycuts pales in comparison to the fuel bill.
10 PM Bob Owens wrote: 
