Somewhat of an interesting topic. I like seeing crap companies like failed micro biotechs and subprime garbage take this route. Usually the 1-10 variety. I'm pretty sure that 90% fail long term. More interesting is the day they happen for day trades. Every time it happens, they fall an easy 5-10%. There are no sure trades but I think these bring a lot of +EV. Sure you can ride them down to pennies and gang up on them and drive them deeper to the depths of hell and then cover but thats not my style. Like a quick reverse pump and dump.... So does anyone here have insight on this. Or anyone have a good source(web site) of where I can find crap stocks that do R/S kiss of death almost routinely each week. Or is this a complete situation to avoid ?
It is very difficult as far as I know to short stocks below $5. The other issue is liquidity, are you able to get out of the positions? Enlighten me on the ability to short stocks under $5 and it would be more interesting. It could be a better strategy for less crappy stocks like JAVA or ericcson those are two stocks that came to mind in the reverse arena.