Fresh out of Chapter 11 bankruptcy, United Airlines parent UAL Corp. began trading its new stock on the Nasdaq stock market Thursday.
The shares, trading under the symbol UAUA, declined by $4.11, or about 10 percent, closing at $35.89. On Wednesday, shares closed at $40 in preliminary trading.
United chairman and chief executive Glenn Tilton on Thursday morning opened the Nasdaq stock market remotely from O’Hare International Airport in Chicago. UAL is based in the Chicago area, and O’Hare is United’s largest hub. Its second- largest hub is Denver International Airport.
“Today marks a new chapter for United, and it starts from a renewed position of strength,” Tilton said.
United chief operating officer Peter McDonald on Thursday afternoon closed trading on the Nasdaq remotely from San Francisco International Airport, which United called its “gateway to the Pacific.”
United’s old shares were canceled. Those shares had been delisted from trading on the New York Stock Exchange. United previously said it secured approvals from Nasdaq and the NYSE for trading its new stock.
In its plan of reorganization, United had given an assumed reorganization value of its new stock of $15 per share, with total equity value of about $1.9 billion.
UAL reported a 2005 operating loss of $219 million, an improvement from a $635 million loss in 2004.
Calyon Securities airline analyst Ray Neidl released a report starting coverage on the new stock with a sell rating, saying that although the shares may temporarily trade up, “we believe the market will adjust to the earnings potential.”
The report also said Calyon believes United’s management “has positioned the company to be competitive in what continues to be a ‘cut-throat’ industry environment, both domestically and internationally.”
“While most carriers are choosing to simplify their models in order to contain unit costs, United is making the model more complex and thus more costly” by tailoring product lines to specific market demands, the report said. Examples are discount operation Ted and United’s premium transcontinental service known as “ps.” “Only time will tell which strategy is superior.”
Staff writer Kelly Yamanouchi can be reached at 303-820-1488 or kyamanouchi@denverpost.com.
