Is American Airlines the new GameStop ($GME) stock?

Edu Perez /

With the stock market becoming a war ground, highlighting the differences between the old and new, could American Airlines (A1G) (AAL) stock become a new battle?

The Dallas/Fort Worth-based carrier’s stock rose as much as 15.4% on January 27, 2021, closing at a price of $16.56 per share. A day prior, the company’s shares closed at $15.53. Notably, the short interest on American Airlines’ (A1G) (AAL) shares is at 25.4%, which indicates that investors are fairly pessimistic about the airline’s outlook.

The company is set to present its latest set of financial results on January 28, 2020, which would provide insight into the carrier’s Q4 2020 and full-year results. Previously, American Airlines (A1G) (AAL) indicated that it expected “its fourth-quarter system capacity to be down more than 50% year over year, with long-haul international capacity down approximately 75% year over year,” read the company’s Q3 2020 results outlook.

American Airlines (A1G) (AAL), as of September 30, 2020, had $29.5 billion of long-term debt, with $13.6 billion in available liquidity, of which $8.3 billion was unrestricted cash. In December 2020, the company warned that its daily cash burn would be at the high end of its previous forecast of between $25 and $30 million per day. Nevertheless, the airline expected to increase its total liquidity to $14 billion.

However, while 25.4% is a high number of shorted shares, 140% of GameStop’s stock was shorted as of January 14, 2021. That day, the video game retailer’s shares closed at $39.9, its highest result in the past five years prior to its jump to the moon in terms of the share price.

Thus, while American Airlines’ (A1G) (AAL) shares are definitely on the upper side of shorted stocks, it is definitely nowhere near the amount of shorted shares of GameStop.


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