Hedge fund manager David Tepper was one of the big losers in the AMR Corporation (AMR, Financial) bankruptcy.
Shares of AMR are down 80% on the announcement.
Tepper was purchasing shares of AMR as recently as the first quarter of 2011. It was reported that Tepper owned 5,799,104 shares of AMR at prices over $6.
Tepper made a sector bet on the airlines industry. He had $92 million worth of United Continental (UAL, Financial), $20 million worth of Delta Airlines (DAL, Financial), and a $110 million position in US Airways (LCC).
AMR had too much debt with a higher cost structure than other airlines like Southwest (LUV, Financial). Over the last 10 years the company lost $12 billion. The company was on pace to lose $1.1 billion in 2011 and another $500 million to $1 billion in 2012.
The main problem with AMR appears to be a labor showdown as labor contracts are past due.
Shares of AMR are down 80% on the announcement.
Tepper was purchasing shares of AMR as recently as the first quarter of 2011. It was reported that Tepper owned 5,799,104 shares of AMR at prices over $6.
Tepper made a sector bet on the airlines industry. He had $92 million worth of United Continental (UAL, Financial), $20 million worth of Delta Airlines (DAL, Financial), and a $110 million position in US Airways (LCC).
AMR had too much debt with a higher cost structure than other airlines like Southwest (LUV, Financial). Over the last 10 years the company lost $12 billion. The company was on pace to lose $1.1 billion in 2011 and another $500 million to $1 billion in 2012.
The main problem with AMR appears to be a labor showdown as labor contracts are past due.
