# Is now the time to buy United Airlines stock?
**URL:** https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479
**Category:** In My Humble Opinion
**Created:** [December 9, 2002, 8:51am UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479 "2002-12-09T08:51:08Z")
**Posts on this page:** 17
**Page:** 1
### Author:  [@Gozu\_Tashoya](https://boards.straightdope.com/u/Gozu_Tashoya)
#### Post date: [December 9, 2002, 8:51am UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/1 "2002-12-09T08:51:08Z")
I mean, UA isn’t _really_ going to go out of business, is it? It seems to me that there’s a pretty good chance that the gov’t may pull a Chrysler and bail their asses out if it really came down to it.
So should I sink a few hundred bucks that way, or is there a very real possibility that they’re going to pull an Enron and be dead and gone a month from now?
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### Author:  [@Muad\_Dib](https://boards.straightdope.com/u/Muad_Dib)
#### Post date: [December 9, 2002, 9:01am UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/2 "2002-12-09T09:01:20Z")
I would not be surprised if they did go out of business. When the airlines were deregulated (by Ted Kennedy of all people, I still can’t get over that.) the unspoken idea was that the big airlines would quickly go out of business and be taken over by the Southwest airlines of the world.
That has not happened.
A big reason why is the government always coming along to bail out these aged behemoths. This may very well be the death-nell of the big airline companies.
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### Author:  [@butter\_pie](https://boards.straightdope.com/u/butter_pie)
#### Post date: [December 9, 2002, 11:44am UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/3 "2002-12-09T11:44:25Z")
It is very, very likely that they are going to declare bankruptcy very soon. I wouldn’t buy it and the market shows I listen to have recommended staying away from it as well.
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### Author:  [@Ell](https://boards.straightdope.com/u/Ell)
#### Post date: [December 9, 2002, 12:48pm UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/4 "2002-12-09T12:48:11Z")
Richard Branson on how to become a millionaire: “You start as a billionaire and buy an airline!”
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### Author:  [@super\_head](https://boards.straightdope.com/u/super_head)
#### Post date: [December 9, 2002, 3:38pm UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/5 "2002-12-09T15:38:10Z")
It’s official - they’re going into Chapter 11 with $1.5 billion in financing to keep them flying while they restructure.
No idea on the future of the stock, but it’s at 82 cents/share right now and thus even a move of a few cents one way or the other can amount to a big loss or gain - you could take your chances with some fun money. 🙂
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### Author:  [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)
#### Post date: [December 9, 2002, 4:08pm UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/6 "2002-12-09T16:08:38Z")
It’s worth a gamble if it’s money you can afford to lose. God knows it’s cheap enough.
But I do think we’re seeing the last vestiges of pre-deregulation airlines. They’re not really feasible in that form any longer.
I wouldn’t be surprised if we see two or more smaller firms come out of the bankruptcy.
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### Author:  [@handy](https://boards.straightdope.com/u/handy)
#### Post date: [December 9, 2002, 4:28pm UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/7 "2002-12-09T16:28:29Z")
They are going to keep flying, far as I know they just have to restructure to make things more profitable. Drop some routes, change salaries, etc.
As for your question. If it were so hot, why aren’t people buying it? Ah ha!
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### Author:  [@interface2x](https://boards.straightdope.com/u/interface2x)
#### Post date: [December 9, 2002, 5:35pm UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/8 "2002-12-09T17:35:59Z")
According to CBS News Chicago, as **super\_head** said, the stock is currently at $.82, but they said it was likely to drop to almost nothing in the next day or two. Buy at your own risk right now.
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### Author:  [@super\_head](https://boards.straightdope.com/u/super_head)
#### Post date: [December 9, 2002, 5:42pm UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/9 "2002-12-09T17:42:30Z")
You could short it!
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### Author:  [@Gozu\_Tashoya](https://boards.straightdope.com/u/Gozu_Tashoya)
#### Post date: [December 9, 2002, 11:31pm UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/10 "2002-12-09T23:31:08Z")
So does deregulation mean that the government (even the big biz friendly Bush administration) is _not_ likely to bail out United? Or, as **Muad’Dib** said, has the government been helping out the big airlines all along (even before 9/11)?
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### Author:  [@handy](https://boards.straightdope.com/u/handy)
#### Post date: [December 10, 2002, 3:41pm UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/11 "2002-12-10T15:41:45Z")
"So does deregulation mean that the government (even the big biz friendly Bush administration) is not likely to bail out United? "
I bet a few select know the truth & are waiting for the right moment to maybe buy it before a bailout so they make a ton of dough.
Reminds me kind of like Oprah. King World each year renews her contract (Or did when I read about this). This is the theory:She would say shes not sure she wants to continue her show next year. Her stock drops & she buys that stock. She then makes a new contract for the next year, her stock rises. She makes money 🙂
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### Author:  [@wireless](https://boards.straightdope.com/u/wireless)
#### Post date: [December 10, 2002, 11:26pm UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/12 "2002-12-10T23:26:25Z")
> [@](#):
>
> \*Originally posted by handy \*
> \*\*Reminds me kind of like Oprah. King World each year renews her contract (Or did when I read about this). This is the theory:She would say shes not sure she wants to continue her show next year. Her stock drops & she buys that stock. She then makes a new contract for the next year, her stock rises. She makes money 🙂 \*\*
AKA “Insider trading”. (i.e. using non-public information)
As to the UAL stock, even if the company restructures and gets funding and comes out of bankruptcy, part of a restructuring plan often involves setting previous shareholders’ equity (stock prices) to $0, effectively “canceling” the current (previous) stock, so that your investment would be worth $0 even if the company itself survived. (Sometimes part of the restructuring plan includes trading old stock for new at some fractional amount.)
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### Author:  [@SandyHook](https://boards.straightdope.com/u/SandyHook)
#### Post date: [December 11, 2002, 12:41am UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/13 "2002-12-11T00:41:24Z")
I wrote my Masters dissertation on bankruptcy investing and it’s not for the faint of heart or those that don’t want, or know how, to spend many hours sifiting through all the documents.
Jonathan Chance wrote"
> [@](#):
>
> It’s worth a gamble if it’s money you can afford to lose. God knows it’s cheap enough
He’s 100% right in saying it’s a gamble. Your chances are about the same as taking $1,000 and going to Vegas. But, you never know, if you can afford to lose it and the idea of GAMBLING appeals to you, jump right in.
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### Author:  [@Cardinal](https://boards.straightdope.com/u/Cardinal)
#### Post date: [December 11, 2002, 9:13am UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/14 "2002-12-11T09:13:25Z")
Just today, Dec 10, I saw an article in the L.A. Times about how UAL stock is considered a BAD buy. Although it spiked a bit (maybe somewhat because of people filling their short positions in its way down), you’re last in line to get paid anything if they do actually just quit and sell off the gate licenses and planes. There are plenty more powerful people ahead of you, and you’re just done, period.
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### Author:  [@China\_Guy](https://boards.straightdope.com/u/China_Guy)
#### Post date: [December 11, 2002, 11:05am UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/15 "2002-12-11T11:05:36Z")
Shareholders are the last to make money. You’re basically shutting your eyes and throwing the dice. Pro’s buying in have done their homework on the probability of a payout or have some sort of information edge.
If you can afford to lose it is generally a bad way to make an investment decision
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### Author:  [@zuma](https://boards.straightdope.com/u/zuma)
#### Post date: [December 11, 2002, 3:00pm UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/16 "2002-12-11T15:00:44Z")
I’ve followed the market as an amateur sometime-investor for a while now, and I have a question:
What are some examples of a chapter-11 filing company’s common stockholders recieving anything after restructuring? Just how often does this occur?
I ask this because I’ve never seen a single company file chapter 11 with common stockholders recovering anything. Surely it has happened in the past, though, however rare.
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### Author:  [@Maeglin](https://boards.straightdope.com/u/Maeglin)
#### Post date: [December 11, 2002, 3:08pm UTC](https://boards.straightdope.com/t/is-now-the-time-to-buy-united-airlines-stock/141479/17 "2002-12-11T15:08:34Z")
I am a bankruptcy professional. My firm represents the official committee of unsecured creditors for several of the largest bankruptcies in the courts today, and with luck, we will also be representing the UAL committee.
> [@](#):
>
> What are some examples of a chapter-11 filing company’s common stockholders recieving anything after restructuring? Just how often does this occur?
I cannot think of a single major corporate bankruptcy in which the shareholders received anything. The current trend in bankrupcty law, in which restructuring companies can make progressively more and more priority payments to “critical vendors” and other superpriority parties will make it yet more difficult for shareholders to collect.
In one of my cases, an equity committee was actually formed, and has been little more than a minor nuisance and a strain on the chapter 11 debtor-in-possession’s resources.
With respect to the investing question, well, I wouldn’t touch UAL stock with hazmat suit on. A little investigation reveals an extremely complicated and faulty business model. I wouldn’t suggest buying and riding, but if you want to day trade over a few pennies, knock yourself out.