Discussion in 'Retail Brokers' started by seasideheights, Oct 7, 2005.
A little OT, but in case it needs to be said, be careful. Lots of people (including me ) got squeezed on UAL with buy-ins. I imagine that's happening with DPH the last couple days, too.
How about describing what happened in detail, I think it would be useful.
crowell weedon has 300k if you can get them. I could not, penson had none as well.
Shorted UAL at an average of 1.21 in December, 2002. Bot Feb 2.5 calls for 0.125 average as upside insurance.
On the afternoon of 2003-01-06, got a notice from IB that the stock (now UALAQ) was no longer borrowable, and would be bought in on 2003-01-08 if I did not do it myself. This was caused by long holders of the stock wanting the borrowed stock back (so they could sell it and/or squeeze the shorts). Bought it back at 1.43 on 2003-01-07, got 0.05 for the calls. Net loss $0.33/share (~25%).
I'll note that the stock remained in the $1 range for some time, so the original premise (that it was a "0") was flawed anyway, and the common ultimately survived the re-org.
Crowell Weedon? What broker uses them?
Wrong. Both the common and preferred will not survive once when the reorganization is effective.
What does it mean that the common stock will be cancelled? Why aren't current common stockholders receiving anything under the Plan?
As the company said would likely be the case for some time, the proposed Plan stipulates that UAL's current Common stock will be terminated and cease to have any value. Unfortunately, current stockholders are unable to receive any distribution because under the law, stockholders are only entitled to receive anything for their equity interests after most creditors are paid in full, which will not be the case. The Reorganized United will issue new stock to its new shareholders pursuant to the Plan. If you would like additional information about the Plan of Reorganization, please visit www.pd-ual.com or www.united.com .
I stand corrected. I was just winging it. Thought they were through already. Funny that it still trades (at something more than 0).
Separate names with a comma.