Can someone explain recent AAMRQ stock price behavior to me?
I'm interested in American Airlines stock (AAMRQ). Recently they announced a merger with US Airways. The resulting company is said to be worth B (USD). Tom Horton, the CEO, said that after creditors are paid out, stockholders of AAMRQ stand to receive 3.5% of the new company. If we assume an 11 billion dollar valuation, 3.5% of that would be 5,000,000. There are ~335,000,000 outstanding shares of AAMRQ. My math tells me these shares should be worth about .15/share. However, as of the merger announcement the shares of AAMRQ have shot up drastically from ~.20 to ~.53.
So my question is - how come the market thinks there's so much value in AAMRQ? A price of 2.50 gives the company a market cap of 7,000,000! Is it possible it will all come tumbling down in the next few days?
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There are things that are clearly beyond me as well. Cash per share is .61 but the debt looks like or so per share. I look at that, and the negative book value and don't see where the shareholders are able to recoup anything.
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