American Airlines Reports Huge Loss As Shares Swept Into Reddit Revolt
Sumaira FH Published January 28, 2021 | 11:01 PM
American Airlines reported on Thursday a massive annual loss due to the continued drag from the coronavirus, but shares soared as the US carrier became the latest vehicle in a burgeoning Wall Street trading revolt by amateur investors
New York, (APP - UrduPoint / Pakistan Point News - 28th Jan, 2021 ) :American Airlines reported on Thursday a massive annual loss due to the continued drag from the coronavirus, but shares soared as the US carrier became the latest vehicle in a burgeoning Wall Street trading revolt by amateur investors.
American reported an annual loss of $8.9 billion, compared with a profit of $1.7 billion in 2019.
Shares surged after the report, soaring as much as 80 percent briefly in pre-market trading before pulling back significantly.
The carrier is the latest company to get swept up in the Reddit-driven "short squeeze" that has affected GameStop and a handful of other equities.
American Airlines Chief Executive Doug Parker declined to address the trading activity on an earnings conference call, instead focusing on the company's expectation for a pickup in travel demand later this year once coronavirus vaccines become widespread.
"The year ahead, 2021, will be a year of recovery," Parker said. "There's still a lot of unknowns, of course, when or how quickly demand will return." Coronavirus vaccines offer promise, but "while it will take some time for them to be widely distributed, progress is being made," he said.
American reported a fourth-quarter loss of $2.
2 billion following a 64 percent drop in revenues to $4.0 billion, after ticket sales fell significantly.
The company said market conditions in the first quarter of 2021 were similar to those at the end of 2020, but while the loss in the fourth quarter was smaller than expected, market watchers viewed the stock's erratic movement as unrelated to those figures.
"We do not believe the move is fundamentally driven," said a note from Cowen equity research.
Instead, the 95-year-old airline appears to be the latest company swept up in a challenge by amateur investors to Wall Street honchos.
The group, organizing via the online platform Reddit, has targeted equities that have been in the crosshairs of short-sellers, investors who bet on a decline in price.
The amateur investors have bought shares of American and other equities that have been shorted, prompting a "short squeeze" that pushes up shares and puts pressure on short sellers to make purchases to "cover" their bets and avoid steeper losses.
The phenomenon has led to massive jumps in GameStop and AMC Entertainment and caught the attention of US securities regulators.
Shares of American were up 8.2 percent to $17.91 in mid-morning trading.
Recent Stories
Security forces kill four terrorists in Tank
Fake immoral video of Ducky Bhai's wife goes on viral on social media
Currency Rate In Pakistan - Dollar, Euro, Pound, Riyal Rates On 29 April 2024
Today Gold Rate in Pakistan 29 April 2024
Currency Rate In Pakistan - Dollar, Euro, Pound, Riyal Rates On 28 April 2024
Today Gold Rate in Pakistan 28 April 2024
Fresh wave of rainfall in AJK continues for the second consecutive day
Babar, bowlers help Pakistan level series 2-2 against New Zealand
Attack in restive Chilean province leaves three police officers dead
PM, Saudi Royal court advisor discuss ways to boost economic ties
England clinch third successive Women's Six Nations Grand Slam
DC Bahawalnagar leads fight for fair bread prices
More Stories From World
-
English version of book about Xi's elaborations on BRI published
1 hour ago -
Alcaraz passes 'test of fire', Sabalenka survives in Madrid Open
3 hours ago -
Clippers thwart Mavs' comeback bid, Brunson's 47 points fuel Knicks win
3 hours ago -
Dozens of tornadoes plow central US, at least 5 killed
3 hours ago -
Hamas delegation to arrive in Egypt for Gaza truce talks
3 hours ago -
Masood Khan hails Pakistani-American physicians role in upgrading Pakistan's healthcare system; also ..
4 hours ago
-
Brunson sets Knicks record with 47 to lead New York over 76ers
4 hours ago -
Football: French Ligue 1 table
10 hours ago -
Inter continue Serie A title party as Bologna slip in Champions League bid
10 hours ago -
Paris Saint-Germain win Ligue 1 title after Monaco defeat
10 hours ago -
Man City see off Forest to close on Premier League leaders Arsenal
11 hours ago -
Italian PM Meloni says will stand in EU elections
11 hours ago