This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Nearly Worthless AMR Shares See Heavy Volume

DALLAS -- ( TheStreet) -- A penny stock adviser said he expects active trading in shares of bankrupt AMR (AAMRQ.PK) to continue this week after shares gained nearly 18% on Monday.

"The volume picked up substantially on Monday, and that is likely to continue," said Mark Adams, director of "The news is positive as well."

Shares in bankrupt AMR, the parent of American Airlines, "are not worth anything," Adams said in an interview on Tuesday. "But I have people who traded that stock for the first time yesterday. They don't care if it's in bankruptcy or not. When it gets under a dollar, for us, it's all about trading. You could own it at 20 cents."

On Monday, the stock traded up 8 cents to close at 53 cents, the highest price since Aug. 13. Volume was 13.8 million shares, compared with average daily volume of 1.7 million during the past three months.

Volume began to pick up last week, increasing from 684,000 on Tuesday to 2.1 million on Wednesday and to 3.5 million on Friday.

Shortly after noon on Tuesday, shares were trading down 4 cents at 49 cents on volume of 8.1 million.

It is possible that some traders believe AMR shares may benefit from the possibility that American pilots will approve a tentative contract agreement that has been endorsed by the Allied Pilots Association. That agreement provides AMR stock for pilots. The miscalculation here is that pilots will receive newly issued shares, not the ones that currently trade.

The New York Stock Exchange delisted American, which had traded under the AMR symbol, on Jan. 5. Trading then moved to the OTC Bulletin Board (OTCBB) and Pink Sheets Electronic Quotation Service as early as Jan. 5, 2012. The shares got a new symbol, AAMRQ.PK.

At that time, AMR warned traders that "in most Chapter 11 cases, holders of equity securities receive little or no recovery of value from their investment."

Bankruptcy law is intended to enable companies to shed obligations and to become healthy again. The path to good corporate health includes the right to issue new stock, much of which goes to satisfy creditors. This requires cancellation of pre-bankruptcy stock.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.18 1.64%
FB $117.43 -0.96%
GOOG $692.36 -0.84%
TSLA $232.32 -3.92%
YHOO $36.01 -1.42%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs