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Delta Done With Bankruptcy Stint

The airline's stock is back on the NYSE.
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Delta Air Lines


has officially ended its 19-month stay in bankruptcy, saying it has cut enough costs and changed its business in a manner that will allow it to succeed financially and operationally.

Shares of Delta began trading Monday on what's known as a "when issued" basis, meaning the stock has been authorized but not yet issued. The airline is preparing to issue 400 million new shares on Thursday. At midday, the when-issued stock was at $20.37 on the

New York Stock Exchange


The stock has an exchange specialist, meets listing standards and has been certified by the

Securities and Exchange Commission

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, said an NYSE spokesman. However, at the moment, trading is geared toward institutions or large brokerage firms due to complicated settlement provisions, the spokesman said.

Delta has said it will issue new shares to bankruptcy creditors and employees as part of its post-Chapter 11 compensation program. Delta will begin wide trading under the symbol "DAL," its ticker before it began bankruptcy, later this week.

The shares that traded on the over-the-counter Bulletin Board will no longer have any value.

"Through our restructuring we have successfully repaired our balance sheet, improved the customer experience, expanded our international route system and built a platform for future success," said Delta Chief Executive Gerald Grinstein in a statement. "Delta is now a fierce competitor in a tough industry, and we are confident that we will reclaim our rightful place as an industry leader."

Grinstein, who plans to vacate his post after the airline's board names a successor, also said that emergence from bankruptcy "is not the end of a journey; instead, it is the beginning of a new and prosperous era at Delta."

In a recent research report, Prudential airline analyst Bob McAdoo said that Delta's new stock may face a decline early in its existence.

"With 400 million new shares coming to the market, the when-issued shares and soon the new DAL, shares are likely to trade near $15 rather than at the current

price," he wrote. "As such, we would encourage selling the when-issued shares, and the new Delta common, unless valuations drop toward $15."

McAdoo added that he didn't mean "to indicate that we feel new DAL will never reach $23 to $25 in the next 12 months," but rather to say the current price would represent a substantial premium over other legacy airlines.