Refco shares plunged 45%

[freehouse]

REFCO 9.000 08/01/12 '08 bonds are trading at 34 cents on the dollar.

 

[range]

buy Treasuries

 

[Cutten]

Quote from gnome:

Agree. This issue is not costing Refco any money [cash] right now... maybe later in SEC fines and lawsuit settlements. The stock price however, could go well below $7-8..... but that wouldn't be a concern for customer accounts.

This is somewhat naive IMO. The risks have increased, so why keep your money there? You can transfer the money out for a pittance, so you have nothing to lose by placing them somewhere safer. Keeping funds at Refco means potential risk, with no gain. Doesn't sound like a good trade to me.

 

[freehouse]

Random thoughts (in my opinion, of course) ....

Published reports suggest that Bennett repaid the $430 million loan via a margin loan against his RFX stock.

Looking at the prospectus, it appears as though Bennett had 28,529,522 shares (this does not include stock in a trust).

As RFX tanks, the firm lending Bennett cash for the margin loan is obviously underwater. Which bank/brokerage firm will be left holding the bag?

 

[Choad]

Quote from freehouse:

Published reports suggest that Bennett repaid the $430 million loan via a margin loan against his RFX stock.

Yikes! Just gets better n better...

I was wondering how he came up with $430 mil so fast. Most ppl don't have that kind of scratch laying around the house.

Well...I do, of course...there's probably enuf under my couch cushions...(well 43 cents of it, anyway)

 

[bladerunner]

lawyers are the greatest inventions of men/beasts.