CHARLOTTE, N.C. ( TheStreet) -- Investors were bidding up shares in bankrupt American Airlines ( AAMRQ.PK) and selling off US Airways ( LCC) on Thursday after the two carriers said they would merge.

In mid-afternoon trading, American shares were gaining 56%, up 70 cents to $2. US Airways share were trading down 9%, or $1.40, to $13.26.

The American shares were benefiting from the disclosure that shareholders would get at least 3.5% of the new company and possibly more, depending upon whether creditor claims were fully satisfied. "Having equity created for existing shareholders (in a bankrupt company) is, as you know, extraordinary," AMR CEO Tom Horton said Thursday, on a conference call with analysts and reporters.

"Once the unsecured creditors are fully satisfied, any incremental value that gets created goes to the equity holders, over and above that 3.5%," Horton said.

CRT Capital Group analyst Kevin Starke said that if the AMR shareholders receive 3.5% of the $11 billion estimated value of the newly created American, the shares would be worth about $1.16.

Today's higher valuation means "there seems to be some expectation of upside, either through the warrant that they may get or through striking a better deal," Starke said, in an email.

Starke was the first analyst to perceive that the AMR shares may have value.Typically, shares in a bankrupt company are cancelled, with no remuneration to shareholders, so that the company can issue new shares when it emerges.

As for US Airways shares, JP Morgan analyst Jamie Baker wrote Thursday that the merger "was broadly anticipated, suggesting a post-deal pullback as some sell the news." Baker said airline stocks in general may be set to fall by 10% to 15%. A second factor, besides the merger announcement, is that "fuel prices have crept steadily higher since most (analysts) last marked their models, likely leaving consensus estimates too high.

"But while fuel has the ability to disrupt individual quarterly results, there's nothing to suggest the broader structural thesis is in jeopardy," Baker wrote. "Put differently, the long-term profit prognosis remains the best we've seen in 20 years."

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed