US Airways Dividend Miles (Pre-FlightFund Merger) - Buy US Stock?

I'm considering buying some airline stock and want to know what you all would do... I know that you bank your preferred status with US, but would you bet the "bank" on their recovery and future profitability?

Just wanted to get some opinions on it, which is better than any regular broker could provide...

SWA is the only one making any money.

I wouldn't think of buying it. As a consequence of the bankruptcy, the common stock is going to be wiped out, it's just a matter of when (pretty much standard practice in bankruptcy cases). New stock will be issued, but only after they come out of bankruptcy. You may want to buy it then - but not a moment before.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by CLTFlyer:
As a consequence of the bankruptcy, the common stock is going to be wiped out, it's just a matter of when (pretty much standard practice in bankruptcy cases). </font>

Even so, nearly 200K shares traded today at $0.57-$0.59 per share. Odd.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by CLTFlyer:
I wouldn't think of buying it. As a consequence of the bankruptcy, the common stock is going to be wiped out, it's just a matter of when (pretty much standard practice in bankruptcy cases). New stock will be issued, but only after they come out of bankruptcy. You may want to buy it then - but not a moment before. </font>

That's not definite. A very strong possibility but not completely locked in. (Which is why it still trades at all.)

You'd need a very strong stomach to buy it right now. Or disposable income that is truly disposable.

I am considering buying an equal dollar amount of all of the so called "Big Six". The fact is that ultimately the industry will rebound stock price wise. So the question that remains in my mind is will it rebound enough for the profit from the 4 that remain to positively offset the 2 that fail? US might be closer to the drain pipe right now, but I don't think they're going to be the ones that fail permanantly. UA has a very real chance of ending up liquidated and the others (including US) have one foot in the grave and another on a banana peel! But after all of the dust settles and whoever is left standing will see their stock go up.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by TomBascom:
That's not definite. A very strong possibility but not completely locked in. (Which is why it still trades at all.)

You'd need a very strong stomach to buy it right now. Or disposable income that is truly disposable.</font>

You are correct, but I'm hard pressed to name another large company where Chapter 11 did not result in the cancellation of the old common stock and issuance of the new common stock to the creditors.

100 shares would set you back about $80 with discount brokerage commissions. I'd get fewer odd looks from friends and family if I told them I blew $80 on lottery tickets than $80 on common stock of a company already in bankruptcy.

Now convertible preferred stock is another story. That stuff may have some upside.

From US Airways' latest SEC 10-Q report, filed on 11/14/02:

Under the priority scheme established by the Bankruptcy Code, unless creditors agree otherwise, pre-petition liabilities and post-petition liabilities must be satisfied in full before shareholders are entitled to receive any distribution or retain any property under a plan. The ultimate recovery to creditors and/or common shareholders, if any, will not be determined until confirmation of a plan or plans of reorganization. No assurance can be given as to what values, if any, will be ascribed in the Chapter 11 cases to each of these constituencies or what types or amounts of distributions, if any, they would receive. A plan of reorganization could result in holders of the Company's common stock (Common Stock) receiving no distribution on account of their interests and cancellation of their existing stock. The RSA Investment, if consummated, contemplates the cancellation of the Common Stock. As discussed above, if the requirements of section 1129(b) of the Bankruptcy Code are met, a plan of reorganization can be confirmed notwithstanding its rejection by the holders of the Company's Common Stock and notwithstanding the fact that such holders do not receive or retain any property on account of their equity interests under the plan. In addition, the New York Stock Exchange (NYSE) issued a statement on August 14, 2002 that the Company's Common Stock would be suspended immediately. As a result, trading in the Company's Common Stock was suspended. Shortly thereafter, an application was made to the SEC to delist the Common Stock.

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Thank you for choosing Continental Airlines, a proud member of the SkyTeam Alliance.

Spend your money to buy an upgrade! At least you will see some benefit to your money. Buying UAL stock is a much safer investment than U! Issues like BA is even safer. BA=Boeing, sorry.