After watching stocks in American Airlines skyrocket due to the ongoing frenzy on Wall Street, the carrier has announced a new plan to sell up to $1.1 billion worth of shares.
According to Market Watch, American stock surged Thursday following fourth-quarter and full-year results, with shares jumping by as much as 87 percent after gaining the attention of Reddit’s WallStreetBets forum.
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Officials from American filed a motion with the Securities and Exchange Commission to enter a “new equity distribution agreement” for the sale of up to $1.12 billion worth of shares with Goldman Sachs, Citigroup, Barclays and BNP Paribas.
On Thursday, the airline announced it terminated the previous $1 billion equity distribution agreement, saying it had raised $882.4 million through the sale of 68.56 million shares of common stock.
Earlier this week, American reported a record quarterly loss of $2.2 billion in the fourth quarter, a 64 percent drop to $4.03 billion from the $11.3 billion reported in 2019. While the carrier exceeded analyst forecasts, officials have acknowledged the coming months will continue to be difficult as new travel restrictions and a slow rollout of vaccines hinder hopes for a near-term recovery.
The airline expects capacity to be down 45 percent and revenue to dip by 60-65 percent in the first quarter of 2021 compared to the previous year, before COVID-19 ravaged the industry.
American also announced it had re-hired 17,500 workers who were furloughed back in October, but reports claim the carrier doesn’t have enough work to go around. Airlines are still flying at only about 40 percent filled compared to 2019 numbers, and as a result, there are fewer flights and less need for so many employees.
