Hi all
Please help me understand..
If a company.. say.. “CORP-X” .. Has filed for chapter 11 and is undergoing the restructuring..
And still generating a solid loss.. like 100M+ per quarter…
And has a massive debt.. 1000M+
And the only way to succeed with the chapter 11 is to convert debt to stock which essentially makes the stock a lot less worth, as it.. the way I understand it.. is watered out with all the new stocks from the converted debt ..
So 2 possible outcome…
1. Bankruptcy
2. Stock worth less than 25% than it is now..
Wouldn't that be a good stock to short ?
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