The Shorting of Frauds, Overhyped and Bankrupt Stocks Journal

Quote from m22au:

DMND:
http://www.elitetrader.com/vb/showthread.php?s=&postid=3549472#post3549472

Daal - are you specifically looking for companies that will go to zero (or significantly close to zero)?

The reason I ask is that there are companies like NBG, which may not go to zero, but are highly likely to experience massive dilution, yet remain as multi-billion dollar (euro) companies.
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I have $15 puts on DMND but they expire at the end of this week. This stock has tons of red flags. They are talking about even missing the shareholders meeting which is like at the end of next month!
 
Quote from m22au:

DMND:
http://www.elitetrader.com/vb/showthread.php?s=&postid=3549472#post3549472

Daal - are you specifically looking for companies that will go to zero (or significantly close to zero)?

The reason I ask is that there are companies like NBG, which may not go to zero, but are highly likely to experience massive dilution, yet remain as multi-billion dollar (euro) companies.
More...

I'm just watching NBG at this point. I have a hard time shorting these stocks that are down huge and are close to being worth less than a buck. They can spike so nastily. Are you short calls?
 
You're right that it could spike nastily.

But I'd just see that as an opportunity to short some more. They need to raise over 7 billion EUR versus a < 1 billion EUR market cap.

I'm short NBG ADRs.


Quote from Daal:

I'm just watching NBG at this point. I have a hard time shorting these stocks that are down huge and are close to being worth less than a buck. They can spike so nastily. Are you short calls?
More...
 
Quote from Chuck Krug:

check out KSS TPX UBNT
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KSS, not sure what is the case there. It just seem like a dept store like any other. They have more debt than cash but also have healthy positive operating cashflow so it can be sustained. I wouldn't expect this stock to underperform its sector by a large amount. What is the bear case here?

TPX seem to be a growth story and the stock is already down huge. Current assets are 3x larger than current liabilities so their liquidity is fine(for now), I'm not inclined to get involved given that earnings deterioration has already been priced. There might be some downside left but I'm not sure the potential is worth the risk

UBNT, lots of red flags from what I've read(indirect sales to Iran, mafia connections), the stock is down huge and the company has good liquidity(current ratio doing just fine). They kind of ROE they are generating certainly suggest something shady is going on(Stellar companies are rare). If you have more info on this stock let me know, it could be collapse if the government sues or takes enforcement actions
 
be carefull in UBNT.
half the float is shorted, so it will squeeze hard.

Tech-focused Saratoga Research, which has had a long-term sell on the company, has focused on several earnings quality issues, including:

The company’s reliance on selling to distributors, rather than to the end customer. Most of Ubiquiti’s sales go through distributors, with two distributors accounting for this “sell-in” method, which is considered aggressive and rarely used by hardware companies. Among the concerns: That it could lead to channel stuffing. By contrast, Cisco uses the “sell-through” method of recognizing revenue once an end customer has bought the product.

An increase in account receivable days outstanding in recent months. Over the past few quarters they’ve been increasing. On last quarter’s earnings call the company blamed the increase on a number of things, including factory shutdowns in China associated with the Chinese New Year leading to a quarter that was more “back-end loaded.”
 
kss: basically their management sucks
tpx: maybe we're a little late to the party, but look at that chart again. it really looks like it's going out of busdiness. i'm playing this with 1/4 of my normal size, just in case.
 
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