BOUEY TAH FLYING DEB!! ~ AAL 45% Upside (Detailed Idea)
Bears Dr. Fauci is no Longer in the Main Stream media! Time to Bear on something else, Tech maybe for political drama !?
AAL
performed the worst between other American Listed Airlines in 2020.
Given the Jerome Powell Printing BRRRR or Inflation where more and more people are looking towards Risk On Assets in a cheap interest rate environment where a leap of new capital pushing the markets to newer highs.
The 2019 28$ Traded Stock is at least in my opinion only, should be back at 30$ valuation post COVID.
TSA reported that Holiday season showed a 50% drop in passengers which brings us to todays on the money traded price at 15$.
Countries have started running out of vaccines to administer and others are speculating that "The Back to Normal" is this Summer even if vaccines are not rolled fully where businesses are no longer quite around the world on beaurocratic intervention in the markets without stimulus such as movie theaters, barber shops restaurants on main street.
AAL 22$ Valuation is justified as this is a price we have seen AFTER COVID just 6 months back.
Today we got vaccines being announce in many countries, one with cheese and the other with barbeque sauce ... some countries are offering their people to choose which vaccine to take The US Pfizer / UK AstraZeneca / Chinese Who Cares! ...
Back in Q3 we have seen a proliferation in the amount of bookings and sales through Royal Caribbean Cruse lines, Norwegian and Carnival Cruses while hotels are have shown much better improvement in bookings and restaurants are back to business now.
Yes UK with their problems and updated virus woes to keep big pharma liquid is normal.
Note:~ I/We have a large position in AAL American Airlines 15.68, which by the way is cheaper than what directors purchased their shares in February 2020 which was around 25 - 18$.
AAL
performed the worst between other American Listed Airlines in 2020. Given the Jerome Powell Printing BRRRR or Inflation where more and more people are looking towards Risk On Assets in a cheap interest rate environment where a leap of new capital pushing the markets to newer highs.
The 2019 28$ Traded Stock is at least in my opinion only, should be back at 30$ valuation post COVID.
TSA reported that Holiday season showed a 50% drop in passengers which brings us to todays on the money traded price at 15$.
Countries have started running out of vaccines to administer and others are speculating that "The Back to Normal" is this Summer even if vaccines are not rolled fully where businesses are no longer quite around the world on beaurocratic intervention in the markets without stimulus such as movie theaters, barber shops restaurants on main street.
AAL 22$ Valuation is justified as this is a price we have seen AFTER COVID just 6 months back.
Today we got vaccines being announce in many countries, one with cheese and the other with barbeque sauce ... some countries are offering their people to choose which vaccine to take The US Pfizer / UK AstraZeneca / Chinese Who Cares! ...
Back in Q3 we have seen a proliferation in the amount of bookings and sales through Royal Caribbean Cruse lines, Norwegian and Carnival Cruses while hotels are have shown much better improvement in bookings and restaurants are back to business now.
Yes UK with their problems and updated virus woes to keep big pharma liquid is normal.
Note:~ I/We have a large position in AAL American Airlines 15.68, which by the way is cheaper than what directors purchased their shares in February 2020 which was around 25 - 18$.
Trade active:
Amazing News for AAL,
NO DIVIDENDS TILL MARCH 2022 and More Loans from the Treasury, Government is now a bigger influencer of this company.
8K Form Filed today;
PSP2 Agreement
Pursuant to the PSP2 Agreement, the Treasury is to provide to the Company financial assistance to be paid in installments (each, an “Installment”) expected to total in the aggregate at least $3,086.8 million. The first Installment, in the amount of approximately $1,543.3 million, was disbursed by the Treasury on January 15, 2021.
Even Better News for Investors;
"In connection with PSP2, the Company is required to comply with the relevant provisions of the PSP Extension Law, including the requirement that funds provided pursuant to the PSP2 Agreement be used exclusively for the continuation of payment of employee wages, salaries and benefits, the requirement against involuntary furloughs and reductions in employee pay rates and benefits through March 31, 2021, the requirement to recall employees involuntarily terminated or furloughed after September 30, 2020, the provisions that prohibit the repurchase of the Company’s common stock, $0.01 par value per share (the “Common Stock”), and the payment of common stock dividends through March 31, 2022, as well as those that restrict the payment of certain executive compensation until October 1, 2022. The PSP2 Agreement also imposes substantial reporting obligations on the Company and the Subsidiaries."
Warrant Agreement and Warrants
As compensation to the United States Government for the provision of financial assistance under the PSP2 Agreement, and pursuant to the Warrant Agreement, the Company has agreed to issue warrants (each a “Warrant” and, collectively, the “Warrants”) to the Treasury to purchase shares (the “Warrant Shares”) of the Common Stock. The exercise price of the Warrant Shares is $15.66 per share (which was the closing price of the Common Stock on The Nasdaq Global Select Market on December 24, 2020) (the “Exercise Price”), subject to certain anti-dilution provisions provided for in the PSP Warrant.
Pursuant to the Warrant Agreement, (a) on the Closing Date, the Company issued to the Treasury a Warrant to purchase up to an aggregate of approximately 2,765,090 shares of Common Stock based on the terms described herein and (b) on the date of each increase of the principal amount of the Promissory Note in connection with the disbursement of an additional Installment under the PSP2 Agreement, the Company will issue to the Treasury an additional Warrant for a number of shares of Common Stock equal to 10% of such increase of the principal amount of the Promissory Note, divided by the Exercise Price. Assuming the total Installments to be paid pursuant to the PSP2 Agreement aggregate approximately $3,086.8 million, the total number of Warrant Shares issuable is 5,721,750, subject to certain anti-dilution provisions, including, among others, for below market issuances and payment of dividends, provided for in the Warrants.
The Warrants do not have any voting rights and are freely transferrable, with registration rights. Each Warrant expires on the fifth anniversary of the date of issuance of such Warrant. The Warrants will be exercisable either through net share settlement or cash, at the Company’s option.
NO DIVIDENDS TILL MARCH 2022 and More Loans from the Treasury, Government is now a bigger influencer of this company.
8K Form Filed today;
PSP2 Agreement
Pursuant to the PSP2 Agreement, the Treasury is to provide to the Company financial assistance to be paid in installments (each, an “Installment”) expected to total in the aggregate at least $3,086.8 million. The first Installment, in the amount of approximately $1,543.3 million, was disbursed by the Treasury on January 15, 2021.
Even Better News for Investors;
"In connection with PSP2, the Company is required to comply with the relevant provisions of the PSP Extension Law, including the requirement that funds provided pursuant to the PSP2 Agreement be used exclusively for the continuation of payment of employee wages, salaries and benefits, the requirement against involuntary furloughs and reductions in employee pay rates and benefits through March 31, 2021, the requirement to recall employees involuntarily terminated or furloughed after September 30, 2020, the provisions that prohibit the repurchase of the Company’s common stock, $0.01 par value per share (the “Common Stock”), and the payment of common stock dividends through March 31, 2022, as well as those that restrict the payment of certain executive compensation until October 1, 2022. The PSP2 Agreement also imposes substantial reporting obligations on the Company and the Subsidiaries."
Warrant Agreement and Warrants
As compensation to the United States Government for the provision of financial assistance under the PSP2 Agreement, and pursuant to the Warrant Agreement, the Company has agreed to issue warrants (each a “Warrant” and, collectively, the “Warrants”) to the Treasury to purchase shares (the “Warrant Shares”) of the Common Stock. The exercise price of the Warrant Shares is $15.66 per share (which was the closing price of the Common Stock on The Nasdaq Global Select Market on December 24, 2020) (the “Exercise Price”), subject to certain anti-dilution provisions provided for in the PSP Warrant.
Pursuant to the Warrant Agreement, (a) on the Closing Date, the Company issued to the Treasury a Warrant to purchase up to an aggregate of approximately 2,765,090 shares of Common Stock based on the terms described herein and (b) on the date of each increase of the principal amount of the Promissory Note in connection with the disbursement of an additional Installment under the PSP2 Agreement, the Company will issue to the Treasury an additional Warrant for a number of shares of Common Stock equal to 10% of such increase of the principal amount of the Promissory Note, divided by the Exercise Price. Assuming the total Installments to be paid pursuant to the PSP2 Agreement aggregate approximately $3,086.8 million, the total number of Warrant Shares issuable is 5,721,750, subject to certain anti-dilution provisions, including, among others, for below market issuances and payment of dividends, provided for in the Warrants.
The Warrants do not have any voting rights and are freely transferrable, with registration rights. Each Warrant expires on the fifth anniversary of the date of issuance of such Warrant. The Warrants will be exercisable either through net share settlement or cash, at the Company’s option.
Trade active:
With the drop in Oil and Airlines recently, Its fit to go ahead and revisit the situation.
AAL was the least impacted as the drop was less than 4 % while most Oil and others in the Airlines have crossed 5 %.
I am now in negative positions on average of 16$.
We are NOT Selling, We are pumping more Capital to BOUEY TAH FLYING DEB !!
I acknowledge the risks and shall be placing limit orders to buy on the 14.5$ Level. We believe the UK 22k COVID Cases reported today are now 68% down from early Jan of 68K cases high. The Scare is NOT There!
I would recommend placing orders below 15$ if markets are stable to avoid FOMO! I expect the drop may hit the 13.5$ as a fair bad case.
Our targets remain at 22$ before 1st of May.
AAL was the least impacted as the drop was less than 4 % while most Oil and others in the Airlines have crossed 5 %.
I am now in negative positions on average of 16$.
We are NOT Selling, We are pumping more Capital to BOUEY TAH FLYING DEB !!
I acknowledge the risks and shall be placing limit orders to buy on the 14.5$ Level. We believe the UK 22k COVID Cases reported today are now 68% down from early Jan of 68K cases high. The Scare is NOT There!
I would recommend placing orders below 15$ if markets are stable to avoid FOMO! I expect the drop may hit the 13.5$ as a fair bad case.
Our targets remain at 22$ before 1st of May.
Trade active:
Closed on the 17.19 level.
Looking for market volatility post-earnings, however, we are seeking 16.5 to re-enter
Looking for market volatility post-earnings, however, we are seeking 16.5 to re-enter
Trade closed manually:
I missed on the jump today, SAD!!
Trade active:
I have booked more gains around the 18.65 level!
We re-entered with and average price of 17.9, we shall be upsizing our position during the current week as we monitor market conditions.
Yes the drop scary to 16.8 however we shall be averaging down and holding this stock to summer. We believe AAL is undervalued and is fairly priced on the 22$.
I also believe that the Stock offering drama that has driven the price down was uncalled!
Quote
"On October 22, 2020, AAG entered into an Equity Distribution Agreement (the “Prior ATM”) providing for the sale, from time to time through the investment banks identified therein, of shares of our common stock having an aggregate offering amount of up to $1,000,000,000. Since its inception on October 22, 2020 through January 28, 2021, AAG sold an aggregate of 68,561,487 shares of its common stock at an average price of $12.87 per share, raising gross proceeds of approximately $882.4 million. On January 28, 2021, we provided notice of the termination of the Prior ATM, effective as of January 28, 2021."
I do expect more down side and volatility risk however, we are willing to hold our positions till year end no problems as We know that AAL has a back door to cheap debt from the US treasury and can continue pulling cash when needed for bad times.
I believe February is going to be dull with COVID still in play, people will however get a way to travel in the summer and shall see excess returns compared to SP500 15% per year.
We re-entered with and average price of 17.9, we shall be upsizing our position during the current week as we monitor market conditions.
Yes the drop scary to 16.8 however we shall be averaging down and holding this stock to summer. We believe AAL is undervalued and is fairly priced on the 22$.
I also believe that the Stock offering drama that has driven the price down was uncalled!
Quote
"On October 22, 2020, AAG entered into an Equity Distribution Agreement (the “Prior ATM”) providing for the sale, from time to time through the investment banks identified therein, of shares of our common stock having an aggregate offering amount of up to $1,000,000,000. Since its inception on October 22, 2020 through January 28, 2021, AAG sold an aggregate of 68,561,487 shares of its common stock at an average price of $12.87 per share, raising gross proceeds of approximately $882.4 million. On January 28, 2021, we provided notice of the termination of the Prior ATM, effective as of January 28, 2021."
I do expect more down side and volatility risk however, we are willing to hold our positions till year end no problems as We know that AAL has a back door to cheap debt from the US treasury and can continue pulling cash when needed for bad times.
I believe February is going to be dull with COVID still in play, people will however get a way to travel in the summer and shall see excess returns compared to SP500 15% per year.
Comment:
On the Takeover potential. AAG did mention there maybe difficulties to replace management. We believe its hogwash and the cheap money today shall make AAL at threat to a hostile takeover should the price go down. Management does understand that they wouldn't be paid bonuses or dividends to share holders as a covenant from the US Loan, which means they got to work to keep their jobs from a takeover for a change. Overall we are very bullish on AAL in 2021.
Comment:
SEC Filed, Blackrock Inc stake in $AAL has increased from 4.8% in December to Now 5.2%, that 4% more.
We are looking to increase our stake later in this week should the price remain stagnant around these levels.
We are not hopeful of another bailout to the airlines of the same significance of the previous 2 as the back door to US treasury remains open while the treasury is now almost 10% owner of AAL.
We believe most airlines are making sweet cargo money while maintaining poverty on the face for tax payers bailout.
We are looking to increase our stake later in this week should the price remain stagnant around these levels.
We are not hopeful of another bailout to the airlines of the same significance of the previous 2 as the back door to US treasury remains open while the treasury is now almost 10% owner of AAL.
We believe most airlines are making sweet cargo money while maintaining poverty on the face for tax payers bailout.
Trade active:
We haven't seen enough buying pressure on the second break of 18$ and decided to go out at almost break even. I positioned myself now at 17.6$. We shall be channelling more free funds into $AAL before market close on Fridayand hoping to be able to buy more below 17$. we are now looking at 25% from the current price to our 22$ target.
We have good reasons to believe Q1 earning is going to be bad, however, we have no reason for this stock to continue in a prolonged downtrend due to various reasons.
We have good reasons to believe Q1 earning is going to be bad, however, we have no reason for this stock to continue in a prolonged downtrend due to various reasons.
Trade active:
We have collected more shares on the 16.88$ level bringing our average down to 17.49$
I have very little reasons to believe it's going to drop to 15$ and see 16$ as the worst probable scenario, we are loading more shares below 17 as much as possible today also and maybe releasing other portfolio investments to raise our stake in $AAL should it hit 16.5$
I have very little reasons to believe it's going to drop to 15$ and see 16$ as the worst probable scenario, we are loading more shares below 17 as much as possible today also and maybe releasing other portfolio investments to raise our stake in $AAL should it hit 16.5$
Trade active:
We are hoping to have a good week.
we shall be adding more to our position below 17.5$ if possible.
we shall be adding more to our position below 17.5$ if possible.
Comment:
I have closed my position around 17.72$. This stock hates me I guess, It moves up exactly when I sell the stock =(
However the rest of the guys have been more fortunate staying in for the gains till now.
I am looking to re enter below 18$ on AAL with a cautious approach as we skeptical of policy impact on the markets coming ahead this week while the Global Debt shall be attacked through Taxes only which is an expected move by Dems in 2021 during Q4.
Broadly speaking we are bullish on AAL till 22$ (At Least)
However the rest of the guys have been more fortunate staying in for the gains till now.
I am looking to re enter below 18$ on AAL with a cautious approach as we skeptical of policy impact on the markets coming ahead this week while the Global Debt shall be attacked through Taxes only which is an expected move by Dems in 2021 during Q4.
Broadly speaking we are bullish on AAL till 22$ (At Least)
Trade closed: target reached:
Although I missed out on half of the profits as we made our money from Trading AAL through 15-18.5$ and missed out on the ride from 19-22$.
Time to find for other attractive stocks now.
Time to find for other attractive stocks now.