Speculators Gobble Up Bankruptcy Play AMR (AMR)
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Even though a company goes bankrupt, in rare instances the common stock may still have value after all is said and done.
Apparently someone sees this as being the case with AMR (NYSE: AMR).
After plunging 84 percent Tuesday upon the bankruptcy news, shares of AMR are up 42 percent today.
The company is not saying that its common stock will have any value, but they're also not saying it won't.
In the FAQ of the restructuring page the company put together, the company states:
"It is not possible to predict what the ultimate value of AMR’s common stock may be or whether shareholders should expect any financial recovery in the Chapter 11 proceedings. Shareholders of a company in Chapter 11 generally recover value only if the claims of the secured and unsecured creditors are fully satisfied. Please contact your professional investment advisor for further information and guidance."
Shares continue to trade on the NYSE, although the exchange warned yesterday that it will be closely reviewing the situation for continued listing. The NYSE said they may move to delist the stock if: (1) these price indications or subsequent trading reflect a price deemed to be "abnormally low;" (2) NYSE Regulation receive authoritative advice that the securities are without value; or (3) the Company fall below the New York Stock Exchange quantitative continued listing standards. The NYSE’s quantitative continued listing standards require total market capitalization of not less than $50 million over a 30 trading day period and stockholders’ equity of not less than $50 million, in addition to total market capitalization of not less than $15 million over a 30 trading day period. The NYSE's continued listing standards also require a minimum average share price of $1.00 over a 30 trading day period. The Company is currently in compliance with all of these quantitative continued listing requirements.
If the NYSE listing is suspended, which now appears likely, shares will likely move to the pink sheets.
Apparently someone sees this as being the case with AMR (NYSE: AMR).
After plunging 84 percent Tuesday upon the bankruptcy news, shares of AMR are up 42 percent today.
The company is not saying that its common stock will have any value, but they're also not saying it won't.
In the FAQ of the restructuring page the company put together, the company states:
"It is not possible to predict what the ultimate value of AMR’s common stock may be or whether shareholders should expect any financial recovery in the Chapter 11 proceedings. Shareholders of a company in Chapter 11 generally recover value only if the claims of the secured and unsecured creditors are fully satisfied. Please contact your professional investment advisor for further information and guidance."
Shares continue to trade on the NYSE, although the exchange warned yesterday that it will be closely reviewing the situation for continued listing. The NYSE said they may move to delist the stock if: (1) these price indications or subsequent trading reflect a price deemed to be "abnormally low;" (2) NYSE Regulation receive authoritative advice that the securities are without value; or (3) the Company fall below the New York Stock Exchange quantitative continued listing standards. The NYSE’s quantitative continued listing standards require total market capitalization of not less than $50 million over a 30 trading day period and stockholders’ equity of not less than $50 million, in addition to total market capitalization of not less than $15 million over a 30 trading day period. The NYSE's continued listing standards also require a minimum average share price of $1.00 over a 30 trading day period. The Company is currently in compliance with all of these quantitative continued listing requirements.
If the NYSE listing is suspended, which now appears likely, shares will likely move to the pink sheets.
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