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Btw most of these shareholders have been smart enough to sell immediately when the markets began falling so they will buy these stocks at the bottom and get bai

by sub7 7y ago

Btw most of these shareholders have been smart enough to sell immediately when the markets began falling so they will buy these stocks at the bottom and get bailed out all over again by the taxpayer and watch the capital multiply. I'm all for getting rich but pump and dumps should be (are?) illegal.

tyfon 7y ago
If they're bailed out the government should take over the stock and if they survive the government can recoup the money it cost to bail them out by selling stock again. It's how it works in most countries at least.
- sauwan 7y ago
  Ah yes, not in American "Capitalism".
- wil421 7y ago
  The Feds sold their Government Motors (GM) stock and other stocks they bought during the last bailout. I don’t see why they wouldn’t do it again for Delta or AA. At one point they owned 60% of GM.
Lazare 7y ago
> Btw most of these shareholders have been smart enough to sell immediately when the markets began falling so they will buy these stocks at the bottom and get bailed out all over again by the taxpayer and watch the capital multiply. If they sold, then they're no longer shareholders; there are new shareholders, and they will be the ones to receive any potential bailout. There's two sides to every transaction. If people were selling, someone was buying. If someone will be buying, someone will be selling. The sort of people who invest in distressed companies (and I think all airlines count as that right now) tend to be hedge funds and other sophisticated investors; they're hardly going to give any potential gains to previous shareholders asking for their stocks back because they changed their mind hearing about a bailout.
- airlines55 7y ago
  Please don't be facetious. The OP was clearly implying that the ones who make it ahead in such situations is that very "sophisticated" class of inveators. They surely did not mean that a literal specific investor will somehow get gains from not owning a stock he has sold. Talk about a ridiculous strawman.
- sub7 7y ago
  Ah if only that was the case. Turns out, when the government is involved then the taxpayer is buying but the government is deciding what to buy. There is no hedge fund buying airlines right now. There will be a shitload of them lining up once the government commits to buying the debt because then they know there's only upside from there.
  - Lazare 7y ago
    Gee, maybe you should buy the shared after the announcement then, and pick up some of that free money for yourself? (Ignoring, for the moment, that bailouts generally zero out equity holders to ensure debt holders get paid.) Your cynicism is healthy, but I'm not sure you understand how this process works.
    - sub7 7y ago
      No shit I will. But I happen to be loaded and the cast majority of people are not. It's the people without money to deploy, the people who depend on fixed income (elderly, retired) and the people who had all their money in some index fund or mutual fund (your average Joe) that get screwed.
dougweltman 7y ago
When they get bailed out, what do you think happens to the shares they hold? Company is worth $100, has 100 shares. You own 1 share, worth $1. Company takes $100 from Gov't, not a handout but rather in exchange for stock. Now it's worth $200, there are 200 shares, 100 owned by the government, 99 by other shareholders and 1 by you. In this situation, you're back where you started.
- dariusj18 7y ago
  The math there doesn't work out. There aren't magically 100 more shares. Either the stock has to split (reducing the value of each share by half) or there are enough shares withstanding to sell.

by sub7 7y ago

tyfon 7y ago

If they're bailed out the government should take over the stock and if they survive the government can recoup the money it cost to bail them out by selling stock again. It's how it works in most countries at least.

sauwan 7y ago
Ah yes, not in American "Capitalism".
wil421 7y ago
The Feds sold their Government Motors (GM) stock and other stocks they bought during the last bailout. I don’t see why they wouldn’t do it again for Delta or AA. At one point they owned 60% of GM.

Lazare 7y ago

> Btw most of these shareholders have been smart enough to sell immediately when the markets began falling so they will buy these stocks at the bottom and get bailed out all over again by the taxpayer and watch the capital multiply. If they sold, then they're no longer shareholders; there are new shareholders, and they will be the ones to receive any potential bailout. There's two sides to every transaction. If people were selling, someone was buying. If someone will be buying, someone will be selling. The sort of people who invest in distressed companies (and I think all airlines count as that right now) tend to be hedge funds and other sophisticated investors; they're hardly going to give any potential gains to previous shareholders asking for their stocks back because they changed their mind hearing about a bailout.

airlines55 7y ago
Please don't be facetious. The OP was clearly implying that the ones who make it ahead in such situations is that very "sophisticated" class of inveators. They surely did not mean that a literal specific investor will somehow get gains from not owning a stock he has sold. Talk about a ridiculous strawman.
sub7 7y ago
Ah if only that was the case. Turns out, when the government is involved then the taxpayer is buying but the government is deciding what to buy. There is no hedge fund buying airlines right now. There will be a shitload of them lining up once the government commits to buying the debt because then they know there's only upside from there.
- Lazare 7y ago
  Gee, maybe you should buy the shared after the announcement then, and pick up some of that free money for yourself? (Ignoring, for the moment, that bailouts generally zero out equity holders to ensure debt holders get paid.) Your cynicism is healthy, but I'm not sure you understand how this process works.
  - sub7 7y ago
    No shit I will. But I happen to be loaded and the cast majority of people are not. It's the people without money to deploy, the people who depend on fixed income (elderly, retired) and the people who had all their money in some index fund or mutual fund (your average Joe) that get screwed.

dougweltman 7y ago

When they get bailed out, what do you think happens to the shares they hold? Company is worth $100, has 100 shares. You own 1 share, worth $1. Company takes $100 from Gov't, not a handout but rather in exchange for stock. Now it's worth $200, there are 200 shares, 100 owned by the government, 99 by other shareholders and 1 by you. In this situation, you're back where you started.

dariusj18 7y ago
The math there doesn't work out. There aren't magically 100 more shares. Either the stock has to split (reducing the value of each share by half) or there are enough shares withstanding to sell.