Questions on Holding Companies, specifically AMR Eagle Holdings Corporation

Posted by Rod Speed on August 28, 2009, 4:22 pm

Please log in for more thread options

2.7182818284590... wrote

> Questions on Holding Companies, specifically AMR Eagle Holdings Corporation

> I was reading on wikipedia about holding companies.

> I was surprised on a few things about holding companies.

> 1. AMR Eagle Holdings Corporation owns all of American Airlines.

> How is this ownership different than if American Airlines were NOT

> owned by a holding company?

Its essentially a mechanism for the owership of more than one company.

The reason for having more than one company is to allow the liabilitys
etc of the separate companys to be kept separate, so you can sell off
one company and keep the other assets etc conveniently.

> 2. What benefits does it have if ABC Corporation were a part of

> a holding company VS if it were not part of a holding company?

Its more what the benefit of separate companys is.

> 3. What are the differences in a mutual fund and a holding company?

They are completely different in the sense that mutual funds never
hold more than a small part of the corps they own shares in. Holding
companys usually own a much bigger percentage of the corps they
own and dont own anything like as bits of various corps either.

And the ownership of mutual funds is very different to the ownership of holding
companys.

> So why couldn't the founders of Google be a holding

> company that owns only one stock (that of Google itself)?

That does happen at times but there isnt necessarily much point in going that
route with just one company.

> AMR Corporation (NYSE: AMR) is a commercial aviation business and

> airline holding company based in Fort Worth, Texas, United States.[1]

> Formed in 1982, as part of American Airlines's reorganization, its

> name derives from American Airlines's ticker symbol on the New York

> Stock Exchange. In addition to American Airlines, AMR owns TWA

> Airlines LLC, (formerly Trans World Airlines) and regional airlines

> American Eagle Airlines, successor to Simmons Airlines, and Executive

> Airlines by way of AMR Eagle Holdings Corporation. Regional Airlines

> flown in conjunction with American Airlines marketing brand, known as

> AmericanConnection, are independent of AMR Corporation's divisions and

> subsidiaries, but do operate in conjunction with them in order to

> provide seamless connections to AMRs two principal airline holdings.

> AMR's and AA's Chairperson, President, and CEO is Gerard Arpey.[2]

Posted by Diogenes on August 29, 2009, 7:38 pm

Please log in for more thread options

> 3. What are the differences in a mutual fund and a holding company?

---
A holding company is a corporation that owns other corporations. The law
limits holding companies to "third degree" ;holding companies. A holding
company ensbles someone to have a controlling interest by only owning a
small number of shares of the controlled companies.
For example, you own 51% of Company A which owns 51% of company B which owns
51% of company C.
Your control of Company A gives you indirect control of company C with far
less than 51%. The other 49% of each would be owned by other investors.

A mutual fund company is an investment pool. The fund manager invests in
numerous companies, not to control them, but to create a fund which is sold
to investors. It enables you to own a small percent of a hundred or more
companies without investing in each of them. Instead the mutual fund does
the investing and you own shares in the mutual fund.

Posted by Rod Speed on August 29, 2009, 8:11 pm

Please log in for more thread options

Diogenes wrote:

>> 3. What are the differences in a mutual fund and a holding company?

> A holding company is a corporation that owns other corporations.

Yes.

> The law limits holding companies to "third degree" ;holding companies.

That varys with the jurisdiction.

> A holding company ensbles someone to have a controlling interest by

> only owning a small number of shares of the controlled companies.

> For example, you own 51% of Company A which owns 51% of company B

> which owns 51% of company C.

> Your control of Company A gives you indirect control of company C with far

less than 51%. The other 49% of each would

> be owned by

> other investors.

That isnt the main reason for the use of holding companys.

> A mutual fund company is an investment pool. The fund manager

> invests in numerous companies, not to control them, but to create a

> fund which is sold to investors. It enables you to own a small

> percent of a hundred or more companies without investing in each of

> them. Instead the mutual fund does the investing and you own shares

> in the mutual fund.