Well, well, well…
I’m not much of a stock market person. But this looks like an interesting development to me!
Airlines have been beating up their passengers more and more in recent years. But now, with the double whammy of the 737Max and now the pandemic COVID-19, I think they all are hurting.
Makes me wanna buy stock and sit in on shareholder meetings!
~VOW
You could be buying stock that will become worthless if the company tanks. But it’s your money, knock yourself out!
Actually United is done to $26.15 as recently as last November it was near $80. If you bet United won’t be allowed to fail, it could be a good buy. Not this year, but within 2 years it could bounce back very nicely.
Me, I hate United, so I wouldn’t invest with them, but I can see where it could be a good buy. I think they’ll survive.
It may not fail, but what sometimes happens is the shareholders get nothing while the debt holders get equity.
That by definition is a bankruptcy, or a fail.
That’s what my father thought about GM.
While this is related to the pandemic, it’s actually more about business. I think IMHO is more appropriate.
Colibri
Quarantine Zone Moderator
Every few years I take a good look at Ford and then find reasons not to buy Ford. GM hasn’t ever looked like a good buy in my investing life.
Sorry. By failure, I imagined the complete shutdown of the airline.
A secondary offering is a way to issue more shares and dilutes the current shares. So, just as a company raises money from an IPO, a secondary offering allows them to raise more money.
For me, I’ll never buy an airline stock. There’s 5000 other stocks to buy out there.
There’s an old joke that goes something like:
How do you become a millionaire by investing in the airline industry?
You start out as a billionaire.
I believe it was the then chairman of American Airlines who said that tallied up over the life of the airline industry the net return on investment is zero. Better than losing money, but since the dawn of the modern airline industry in the 30’s (or late 20’s) they have lost as much money as they have earned. I don’t know how many industries can equal that.
To paraphrase Groucho Marx, any public stock offering so desperate that they’d invite me to participate is an offering I’d want to stay away from.
I think Warren Buffet said something like this but I don’t know if it originated with him.
Could be. He (Robert Crandall) definitely said that although he was the head of an airline he would never put any money into one.
More recently another AA chairman, Doug Parker, said American Airlines would never lose money again. Guess he was wrong.