ATLANTA – Delta Air Lines Inc.'s (DAL) battered stock fell Wednesday to its lowest level in at least 25 years following the company's warning about further losses and the possibility of bankruptcy.
Shares of the nation's third-largest carrier fell 23 cents, or 7.7 percent, to close at $2.74 in trading on the New York Stock Exchange.
Delta's 52-week low for its stock had been $2.93, the closing price on Oct. 20, 2004, around the time the airline almost fell into bankruptcy before winning deep concessions from pilots and fresh financing from creditors.
Wednesday's closing price is the lowest since Jan. 2, 1980, according to financial Web sites that track such figures. A company spokesman could not immediately say if the stock is at its lowest point ever.
Delta warned in a filing with the Securities and Exchange Commission (search) on Tuesday that it will record a substantial loss for the rest of the year and will need to file for bankruptcy if its cash reserves fall too low or lenders seek immediate payment of its debts.
Some analysts reduced their expectations for the airline following the warning.
Analyst Bob McAdoo of Prudential Equity Group LLC said in a research note Wednesday that his firm has been concerned "for some time" that the list of steps being taken in Delta's transformation plan is insufficient to fix the airline's problems. He said the firm has reduced its price target for Delta's stock from $9 to $1.
In the SEC filing, Delta said that it is considering several moves to keep itself afloat, including more cost cuts and potential asset sales. But even that may not be enough, Delta said.
Delta Air Lines (search), which reported a nearly $1.1 billion loss in the first quarter, had $1.8 billion in unrestricted cash at the end of March. But the airline said in the filing that it expects that its cash level will be substantially lower by the end of the year if it can't increase revenue, cut more costs, sell assets or restructure debt.