Bankruptcy/Chapter 11 / Post-Bankruptcy Stocks
AMR Plan Effective, Equity Distribution Announced
AMR’s Fourth Amended Joint Chapter 11 Plan is now effective, and the Company has emerged from Chapter 11 protection and completed its merger agreement with US Airways Group to officially form American Airlines Group. The Court confirmed AMR’s Plan on October 21, 2013. AMR and US Airways Group jointly announced that the new airline will employ more than 100,000 worldwide and operate nearly 6,700 daily flights to more than 330 destinations in more than 50 countries. “Our people, our customers and the communities we serve around the world have been anticipating the arrival of the new American,” said Doug Parker, C.E.O. of American Airlines. “We are taking the best of both US Airways and American Airlines to create a formidable competitor, better positioned to deliver for all of our stakeholders. We look forward to integrating our companies quickly and efficiently so the significant benefits of the merger can be realized.” The same release continues, “Employees of the new American will benefit from being part of a company with a more competitive and stronger financial foundation, which will create greater career opportunities over the long term. The completed merger also provides the path to improved compensation and benefits for employees.” AMR and US Airways Group further assert that this transaction is expected to generate more than $1 billion in annual net synergies by 2015. The common and preferred stock of American Airlines Group will trade on the NASDAQ Global Select Market under the symbols “AAL” and “AALCP,” respectively.
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Amazon joined Apple in reaching a $1 trillion market capitalization. $1 trillion is about the same as the total value of New York City property and the total value of loans at JP Morgan, the nation’s largest bank in terms of assets. Jeff Bezos’ $160 billion stake would place him (personally) as the #33 largest company in the S&P 500 in terms of market cap, next to Coca-Cola, Disney and Netflix. We aren’t bold enough to predict whether the shares will continue upwards or if they are in a bubble reaching maximum inflation. Setting aside for a moment their investment prospects, let’s admire the truly remarkable milestone that these two companies have reached.
EV/EBITDA: What Is It & Why Are We Using It More?
In reading recent editions of The Turnaround Letter, you have probably noticed that we are increasingly using EV/EBITDA as a valuation measure, rather than the better-known price/earnings multiple. We thought it might be useful to describe this measure and why we like it.
Turnaround Letter Stock Pick Named Top Performer of 2017
What Last Year's Top Stock Pickers Are Buying in 2018
This Forbes write-up follows up on the recent Top Stock Tips report--naming The Turnaround Letter's Crocs recommendation the top performer of 2017: With 90% gains, CROX beat out 100 other investment ideas included in the report; and the stock continues to have value investing appeal, according to Putnam.
George notes, "We see additional upside for the stock in 2018 as management's efforts continue to bear fruit, though the gains will likely be more muted than we saw in 2017."
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