American Airlines’ parent company AMR Corp. late Oct. 3 tried to stem rumors of a pending bankruptcy that forced a temporary stop in share trading and at points reduced its market capitalization to less than $1 billion.
Speculation that AMR will file for Chapter 11 protection, while present for several years, increased in the past weeks as analysts and other industry observers began to note seemingly disturbing signs, such as increased pilot retirements and apparently ambiguous statements from executives.
This had already started to pressure AMR’s stock, but on Monday the company’s shares were affected by a concerted sell-off that pushed its stock as low as $1.75, about 40% below the morning’s opening price. This drop in turn prompted a halt in trading, albeit a temporary one, although shares failed to rebound beyond $2.00 when trading resumed.
“While we generally don’t comment on AMR’s share price performance, there is no company-driven news that has caused the volatility in AMR shares today. The pause in trading of AMR shares was due to automatic triggers established by the New York Stock Exchange (under Rule 80C) that pause trading based on share price volatility,” says AMR in a statement.
The company also took the opportunity to address talk of Chapter 11, noting, “Regarding rumors and speculation about a court-supervised restructuring, that is certainly not our goal or our preference. We know we need to improve our results, and we are keenly focused as we work to achieve that.”
Photo credit: American Airlines
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