yes. I'm not sure how to read this but the desc says "make whole @ 50 until 5/15/19/ CALL 03/28/16 103.25" My guess is that the bond holders have already taken a haircut of 50.
There are probably dozens of recent filings in which the junior stuff was trading in the 20s and 30s a week before they declared. A $3 bond has a skull and crossbones attached. No way they last the year. This is a 2019 maturity? You have to figure that it's a fairly accurate probability (overstated) of them remaining solvent to the maturity (30/1 against). And the things are callable.
Yeah, what I meant to imply was the embedded feature (callable) would add value... and they're offered at four.
I am so frustrated right now. 16 years ago, when I was 15, I traded stocks in my DAD's ameritrade account. I traded $5000 worth for a month, and got the balance to $100K. The SEC accused me of running a pump and dump, and we settled with them by returning the ill gotten gains. Again, Iwas a kid, it was 2000. Fast forward 16 years. I filed bankruptcy in 2009, & have unpaid student loans of 40K that I have ignored since 2008, with no affect to my life. So, my credit score is horrible, & I live my life on cash. With Ameritrade, opened a ROTH IRA in December. Funded it $5500. In January, funded it $5500 more. So 2 tax years covered, trying to make up for lost time. Put all 11K on Blackberry shares/ Tried to then open an individual account with Ameritrade so I could invest more money on Blackberry. Ameritrade denied my account opening. Would not specify reason. I decided to leave Ameritrade, and in fact, had 30 days to move my ROTH IRA because Ameritrade said they would not be my custodian anymore. Got my e-trade accounts opened, transferred my ROTH IRA to e-trade, and funded my individual account with etrade for $3000. Shortly after, they restricted my account stating they can close an account whenever they want and I had 30 days to move my accounts or they would sell off my shares & that would penalize me big time with my Roth IRA. Went to Trade King, tried to transfer my accounts to them, but etrade had a restriction on my account so the transfer was blocked. I called, they removed the restriction, and said I could proceed with the transfer. Before I could tell Tradeking to re-initiate, they too just closed my accounts stating: As part of TradeKing’s account verification program, all accounts are verified against a number of third-party databases. This verification is done to confirm the account holder’s identity along with additional background information including, but not limited to, criminal activity, unpaid debits with financial institutions, or diplomatic affiliation. Your account includes information that may match one or more of the events mentioned above. Regretfully, based on this information we are closing your account. So at this point, I do not know what to do. At the moment, my accounts with etrade are accessible again, & I even funded my individual account another $6,000 and bought more shares of Blackberry. I don't know if etrade is going to follow through on their threat to close my account, or if I now slipped through the cracks, but I don't see what my options are. Will Charles Schwab or Fidelity allow me to have an account? How can I be prevented from having even a roth ira!?!?!
Thanks for all the input. After looking at the different options, instead of trying to finance the cost of the bond by shorting the underlying, I decided to just buy 20k worth of bonds. I have roughly $800 at risk and can use it as a learning experience to see how things play out. If the company survives, I will get a decent return. If they go under and the bond holders get 0, then it was an interesting lotto ticket.
You don't have to marry 'em... they will be highly correlated to CL. You may be able to trade out of them at a decent gain. GL.
Another interesting game to play is to buy subordinate debt with the idea that an activist hedge fund may come along. They buy up debt at pennies on the dollar that should be written off at $0 in a chapter 11, then threaten to drag the chapter 11 out so long that the senior debt holders end up losing less by paying them off then by "winning" where everyone gets $0 in an extended bankruptcy. You don't have the capability to play this game, but you certainly can free-ride on their coattails if you get in before or near the same time as them. BTW, thanks for bringing up the thread. A very interesting discussion that I learned something from.
I don't know anything about the company but if I thought there was a chance, that's how I would trade it. Apollo (the PE firm) did it with LyondellBasel like 6 years ago. Put in 2Bn to buy the distressed debt. 2 years later it's worth 10Bn and they are sill earning billion dollar dividends.