LCC Stock in a Nose Dive

[SpinDoc]

honestly guys, it doesnt matter if oil is priced in dollars or euros, it is still going to cost the same - it will just become harder for us to figure out what the cost is because we'll be the country doing the currency conversions... If you go to Europe today, your dollar converts to .6344 euros, and if a European comes to the US, they get $1.57.

Kids, let's explore what is REALLY happening with the USD and the price of a barrel of oil.

1.) The price of a barrel of oil on the commodities market is denominated in US Dollars (USD) and each time the Fed lowers the interest rate, they release more money into the market, thereby reducing the value of each dollar in circulation. This declining value of the dollar contributes to about a $30/bbl premium.

2.) Wall Street investment banks, hedge funds, and wealthy investors are using oil futures contracts as a hedge against the falling value of the USD, and they are making a killing off the backs of the middle class around the world in the process. This speculation is bidding the price of oil up on a daily basis, and is adding about a $30 to $40/bbl premium.

3.) The US Federal government is watching from the sidelines and doing NOTHING about it because the commodities market is unregulated, and Wall Street is investing their low interest money into oil and other commodities. Through this, the banks and investment firms are making back the money they lost on the housing bubble, which was also unregulated. In other words, the oil bubble is being allowed as a "giveback" to the banks and investment companies that lost their butts on bad mortgage loans, and while the US government did not directly step in and bail out the banks, they are allowing them to take money from the commodities markets, thereby making US consumers bail out the banks through higher prices for energy and food.

4.) The only way to fix this is for the Federal Government to first and foremost tell the truth to the American public, secondly to require anyone who takes out an oil contract to take physical delivery of the product when their contract expires, and thirdly, to raise interest rates and prop up the market value of the USD. If they do each of these, we will see oil prices return to the fundamentals of supply and demand, which would be about $60/bbl.

My bet is that some of these will come to pass by the end of the summer. If not, then you can count on all airline stocks to continue to spiral downward and the world economy to collapse.

 

[Be Careful What You Wish For.]

http://www.sfgate.com/cgi-bin/article.cgi?.../MNC210SK9P.DTL

"Joe Brancatelli of New York, the publisher of a newsletter for business travelers, Joe Sent Me, said that of six major carriers - United Airlines, Continental Airlines, American Airlines, Northwest Airlines, Delta Air Lines and US Airways - he thinks two might be in bankruptcy by year's end, so severe is the crisis."

 

[sharktooth]

My bet is that some of these will come to pass by the end of the summer. If not, then you can count on all airline stocks to continue to spiral downward and the world economy to collapse.

Thanks to all. I agree almost entirely. The end of the summer. The taxpayers have the most leverage then......

 

[phlrez]

To the guy who lost money buying stock in a company on the verge of bankruptcy even though it was only 12 cents/share. Don't expect different results from the same behavior. When you go to LAS there are payback odds on the machines. Go for those with better odds.

LCC may see a "dead cat" bounce. SEC regulation forbid shorts on stock under $5/share. This causes some temp jumps.

Those that say "BUY BUY BUY" are those that bought at $30/share or have worthless options.

 

[phlrez]

As far a bankruptcy goes. For US it's a given. Wouldn't be so bad if all airlines were in trouble. That's where Southwest comes in.
Their model has been out there for many years. Is it a fluke? No. It's too late to emulate them? Yes. There is too much to convert. It's too late.

So WN instead of retiring aircraft, they announce adding flights to DEN. Still sound like a fluke. They will being going international soon also.

Watch out for the sign when management starts asking the employees what they can do to save money.

This bankruptcy will be no different than Aloha. It'll just make a larger *thud* when the fighter falls down and hits the mat.

 

[Be Careful What You Wish For.]

Watch out for the sign when management starts asking the employees what they can do to save money.

And when they start leaving the U for "other opportunities".

 

[CynicalResAgent]

I am pleased to announce a buyout of US. The deal was financed by an old TGIFridays $20.00 gift card that I forgot that I had in the side pocket of my purse. When reached for comment DP said "Potato skins go great with beer."

 

[28L_or_10R?]

Stock price in a perfect financial world of unicorns and pixies is merely speculation of what the average shareholder feels is a fair valuation of a company. There are no unicorns and my neighbor's cat ate the last pixie. LCC stock has been manipulated by day traders since its inception. It has a high volume of trades during the day and typically has a very predictable daily chart pattern. Imagine having a $25,000 margin account and sophisticated trading software. Buy a bunch of LCC shares in the market opening when the share is at or below the previous day's close. The stock rises steadily until about 10:30 am. You then exit and take your profit. Now you can "short" the stock making money from the decrease in the price. Day traders can make a fortune on LCC on a good day. Even on a crappy day! Eventually, the price of a share means little.

Look at the internet boom back in the day. Companies that developed web sites and ran on a mere concept had shares going for big bucks. They were worthless, in reality. LCC share price could go up with Doug Parker merely telling a reporter, "I am going to Chicago to see some people tomorrow. My friends there are having a party for me and the beer is free." Our dismal customer service ratings and MBR could be a reason that our stock has dropped more drastically than others. It's on the investor's minds. But LCC has proven that terrible service and profits can exist hand-in-hand. These are examples of behavioral infuences that have an impact on stock prices. Watch a daily chart and see the spike when a silly rumor gets circulated.

This morning in our break room, everyone was lamenting that we would be out of business by the end of the year. So many sad faces and shaking heads. I have seen this every year that I have been here from the old America West to the new US Airways. We'll be out of jobs by next week. Woe is us! The truth is that there is always someone willing to pour money in a bottomless hole. Take Skybus, for example. The City of Columbus, Port Columbus Airport Authority, and major area businesses (Nationwide and others) subsidized that mess to the very end. You can expect in the future for the company to come to labor with hat in hand asking for pay cuts and concessions. They won't even wait for bk. It will be sooner than we think. The unions will all open the concession stands. Bank on it.

 

[phlrez]

...that we would be out of business by the end of the year. So many sad faces and shaking heads. I have seen this every year.

... You can expect in the future for the company to come to labor with hat in hand asking for pay cuts and concessions. They won't even wait for bk. It will be sooner than we think. The unions will all open the concession stands. Bank on it.

End of the year is a bit soon as you say, there will be desperate measures and others to keep it afloat. Middle of next year is more reasonable.


As in what this guy 'Freedom' is talking about in the "what can you do..." thread.

Non-revs to pay $5-$15 to fly. Exempt commuters.

I have my suspicion he's management and testing the waters here. Expect the free flying to be over soon.

 

[28L_or_10R?]

As in what this guy 'Freedom' is talking about in the "what can you do..." thread.

Non-revs to pay $5-$15 to fly. Exempt commuters.

I have my suspicion he's management and testing the waters here. Expect the free flying to be over soon.

Freedom is the real deal. Busts his hump on the PHX ramp. He's a young-un and a very nice young man. You know as we get older, we are forced to eat alot of excrement sandwiches and over the years it affects our vision - we end up with a crappy outlook on life.

 

[sharktooth]

Freedom is the real deal. Busts his hump on the PHX ramp. He's a young-un and a very nice young man. You know as we get older, we are forced to eat alot of excrement sandwiches and over the years it affects our vision - we end up with a crappy outlook on life.

Could it be you are setting Freedom up to eat an excrement sandwich?

Seniority (length of service) is all about retaining corporate memory and ensuring new hires are educated to scams pulled on a regular basis by the company by providing historical context. This company is quite good at taking ignorant but "concerned" employees and using them to destabilize the work force (fortunately for other airlines, that seems to be all "the US boys" are good at).

My outlook on life has improved tremendously since I have seen the beginnings of employee push-back to management that has, like a mafia gang living off their neighborhood, lived off the wallets of their own employees. This junk job might actually improve to something worth retiring from. I have hope, in spite of the excrement sandwiches I have eaten.

The survivors have become cagey. If you think that represents a "crappy outlook on life", then, perhaps, you are part of the problem.

 

[beachboy]

So true.

 

[eckoa6]

For some reason I have a feeling that the pilot work group will let the ship sink if management comes knocking for concessions. Someone has to stand there ground and I have a feeling the pilots will, be it east or west they will force management to either step up to the plate and work or the company will go the way of many before it.

 

[Piedmont1984]

For some reason I have a feeling that the pilot work group will let the ship sink if management comes knocking for concessions. Someone has to stand there ground and I have a feeling the pilots will, be it east or west they will force management to either step up to the plate and work or the company will go the way of many before it.

You got that right.

Let's keep in mind that the east pilots are working under LOA 93, which are pay rates and working conditions which were forged in the last bankruptcy. We have had no improvements, snapbacks, or raises of any kind since then.

 

[beachboy]

I assure you of this. If they have the unmedigated guile to come knocking again on the Flight Attendants wallet, shut it D O W N. And we will. While sad, it's time to move on from this managment imposed train wreck.