You are an investment advisor for a large securities firm. In this role, you have one young client – Patrick Hall – who recently received a gift in May 2022 of 2,000 shares of American Airlines stock (AAL). At the time of the gift, the stock traded for $19.62 per share; as of August 30, 2022, the shares fell to $13.33 per share. Mr. Hall is concerned because this “gift” represents approximately 70 percent of his investment portfolio, comprised entirely of NASDAQ stocks. While the entire market is feeling the effects of inflation, Mr. Hall is concerned about the company’s potential to continue recovering from the financial impact of the pandemic. This morning you received an email from Mr. Hall asking what he should do with his AAL holdings.
ASSIGNMENT W2: “SELL” EMAIL TO INVESTOR
Task
You are an investment advisor for a large securities firm. In this role, you have one young client – Patrick Hall – who recently received a gift in May 2022 of 2,000 shares of American Airlines stock (AAL). At the time of the gift, the stock traded for $19.62 per share; as of August 30, 2022, the shares fell to $13.33 per share. Mr. Hall is concerned because this “gift” represents approximately 70 percent of his investment portfolio, comprised entirely of NASDAQ stocks. While the entire market is feeling the effects of inflation, Mr. Hall is concerned about the company’s potential to continue recovering from the financial impact of the pandemic. This morning you received an email from Mr. Hall asking what he should do with his AAL holdings.
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Assignment?
Review the AAL overview brief and prepare a persuasive email to your client regarding his AAL stock. No wrong answer exists – simply decide if you would advise him to hold, sell some, or sell all his holdings in the company and explain the reasons behind your recommendation. Remember that your email should include an introductory, body, and closing paragraph. Keep your message as short as possible, using concise language, and including just enough facts to support your recommendation.
I will grade your work based on several criteria: (1) formatting (your email follows professional criteria including opening and closing salutations); (2) content (using clear and concise language, you review the question at hand and make a recommendation, offering just enough background information to support your decision); (3) organization (you begin with an introductory paragraph addressing the purpose of the communication, and you utilize strong paragraph structure throughout); and, (4) grammar.
Deliverables
Submit the following to me at the start of the September 8 class period. Use the following guidelines in completing the assignment:
- Upload one double spaced copy of your email on Canvas under the Assignments menu in the folder labeled W2 (this folder closes within 15 minutes of the start of class – late assignments incur a 10% grade penalty)
- Create the following heading for your “mock” email (this header may be single-spaced)
To: Mr. Patrick Hall
From: Your Name
Subject:
Date:
- Create a signature block at the conclusion of your email with the following information (this closing salutation may be single-spaced)
Your Name
Financial Advisor
123 Tulane University Avenue
New Orleans, LA 70118
Please format your email to one-inch margins, using 12-point Times New Roman font.
AMERICAN AIRLINES – OVERVIEW
Yahoo Finance, 2022
Recent Issues
The pandemic battered the entire airline industry. As travelers returned to the skies in 2021, airlines have begun to recoup 2019 revenue levels. Despite relatively strong domestic demand for air travel, the industry is facing many challenges:
- Political issues and varying COVID restrictions that have slowed international travel
- Fluctuating oil prices impacting costs and pricing
- A sluggish economy, inflation, and the threat of a recession that could further impact air travel
- A reduction in business travel volume
- Labor shortages – airlines are having difficulty recruiting pilots
Some specifics about American Airlines
- The airline reported second quarter revenue in July 2022 of $13.4 billion, a 12.1% increase over second quarter 2019 and an increase of 79.5% year over year; however, costs rose 76.3% year over year, too, by $12.4 billion
- American Airlines has about $15.5 billion in cash reserve to ride out a recession – but is this enough to weather a lengthy slow down?
- American has the highest debt burden of any domestic airline at $37.9 billion
- American’s share price has fallen 9 percent over the past six months
- A panel of 16 analysts predicted the following 12-month stock price – High $28; median $16, low $8 per share
(Motley Fool, 2022; Yahoo Finance, 2022)
New W2 American Airlines assignment 2022
