Bankruptcy Plays

Discussion in 'Trading' started by rtharp, Mar 21, 2002.

  1. We have been talking about these in my office. Thought maybe a discussion here could prove interesting.

    Kmart proved it might have something

    Midway Airlines was once at .02 when it got bailed out by the airlines and in no time was at .75

    Food Maker Inc.

    It's more of a fundamental thing but at least you know what your risk is since you can say it is zero. Sort of like a call option almost with an outright stock.

    Anyone want to add anything. My office is trading one of these now. If we are right we each make $50,000 plus if we are wrong our worse case is losing $500. I like those risk to reward ratios.

    Robert Tharp
  2. I like those numbers too, Robert... mmm, maybe this thread could be used to build up a list of contending stocks...
  3. chs245


    I bought FWC and DANKY. Both are up strongly in the last 2 days. I bought them not because they were possible Bankruptcy plays, but because they showed some inseder buying. Maybe insiders know more. . . . ...

  4. This one has been good to me-- NTWK. Once an 80 dollar stock during the craze, now @ .30 cents. Bitter proxy battle, severe market cap and earnings shrinkage, manipulation charges (what's new). Management seems to have stopped the bleeding and fundamentals, technicals getting better. This one could be a runner with the low float and all. Anyway, got in @ .15 / .25 and still holding.
  5. Cesko


    Is there a comprehensive source of information on bankruptcy situations? thanks
  6. H2O



    Bought some shares of EXDS (Now trading as EXDSQ on OTCBB) Bought at $0.05, currently about $0.025

    If they come back, it might be good.
  7. e_shadoe


    could you correct me if I'm wrong but isn't Exodus bankrupt and the shares not worth anything??? can you explain why you're still holding your shares? are you hoping for a 2 cent bounce or something.
  8. Babak


    I don´t want to engage in rumour mongering but a contact in MSDW is informing me of a rumour going on about a take over in TWSTY. Personally I´m taking it with a mountain of salt as I know that MSDW recently put a strong buy on it.

    Its a chicken and egg question, I guess; do they push it because of the rumour or do they start the rumour to support the push? Do your own DD!
  9. TWTSY debt is high... Dang! Don't think they will buy the company. MAybe only thier assets......
  10. robert, thank you for starting this thred I have been playing bankrupcies and have found out when you make money, you make real money , when you lose you lose it all.
    my guideline is ; is it a chapter 7 play (liquidation) or a chapter 11 play (reorganization?) IMO ENRON is a chapter 7 at the end there will be nothing for the share holders . on the other hand KM , IMO is achapter 11, they have assets , and income and nobody wants to see them go under (especialy the banks they will do their best to help them ,otherwise their books will will look bad.) At present i play km. I had 100 cts Mar. 2.50 calls@ o.5 they expired worthless I olso have 100cts June 2.50 calls @0.10 (close 15/20 friday) hope to do better with these. PETE
    #10     Mar 23, 2002