The Shorting of Frauds, Overhyped and Bankrupt Stocks Journal

Potential monster setup when AMR announces deal with US Air with nothing to shareholders, stock fails to adjust enough and gaps down only 10-20%, I will add to shorts at will

Only risk then becomes a lawsuit by stockholders and the squeeze that it would generate, I believe it happened some bk stock in recent years(Maybe GM, not sure), eventually the judge threw the case out and it didnt even made to trial but it did squeezed a lot of shorts

Stock is highly likely to be cancelled
 
People are saying that the combined AMR US Air will be worth $8B. At current market cap of $263M, shareholders have to get 3%+ of the new company 100% of the time to justify the market cap(Actually more given that people demand a premium for risk)

I'm yet to find any indication or article saying shareholders will get anything. The statements from the parties involved only reinforce that as the deal is clearly rumored to be 70% of AMR creditors and 30% of US Air shareholders(With the union getting 13% of the 70% apparently)

I covered my short today because I now see how big the potential of this trade. If the stock was hard to borrow I would just ride the squeeze but its easy to borrow and its going parabolic on adverse news that is being misinterpreted so I will just let it rally and be in a fully healthy mental condition by the time the news come out(When I get squeezed a ton I'm usually very reluctant to add even though I suspect its the top)

Its an OTC stock so the news algos from the HFTs won't be able to smash the stock instantly so I will be able to short once the deal is announced. Either way I'm making 100% or close to it but at least I won't have to suffer the squeeze

I will reshort on news deal or when the stock starts to show weakness
 
Quote from Daal:

People are saying that the combined AMR US Air will be worth $8B. At current market cap of $263M, shareholders have to get 3%+ of the new company 100% of the time to justify the market cap(Actually more given that people demand a premium for risk)

I'm yet to find any indication or article saying shareholders will get anything. The statements from the parties involved only reinforce that as the deal is clearly rumored to be 70% of AMR creditors and 30% of US Air shareholders(With the union getting 13% of the 70% apparently)

Its an OTC stock so the news algos from the HFTs won't be able to smash the stock instantly so I will be able to short once the deal is announced. Either way I'm making 100% or close to it but at least I won't have to suffer the squeeze

I will reshort on news deal or when the stock starts to show weakness
More...

I agree with the above.

I started shorting this today in the mid 0.70s (on the way up to the 0.85 peak).

Hopefully the stock has another attempt at rallying tomorrow morning, which should provide another opportunity to short into the hype.

There is also the possibility of some "investors" buying the stock if there is a headline early next year that says "AMR and LCC to merge in a $8 billion stock deal" if they fail to read and/or understand the exact detail of what AAMRQ shareholders will/won't receive in such a situation.
 
"Pilots, AMR CEO Review Bankruptcy-Exit Options"

http://online.wsj.com/article/SB10001424127887323297104578177713262656882.html

By dint of ratifying a new, concessionary labor agreement last week, the American pilots will gain 13.5% of the equity in the new AMR when it emerges from court protection, giving them a powerful voice in what path the company takes: exiting as an independent company or merging with US Airways Group Inc., the other major choice.

***

So both the creditors and the pilots should ensure that current AAMRQ shareholders get absolutely nothing.
 
I shorted SWHC today and traded it a few times. I believe Obama's speech was just horrendous to any company sensitive to gun laws. I will cover into panic on monday

This is the worst school shooting in US history. Kids dying also will drive the media and people much more emotional than normal(Obama even cried)
 
You must log in or register to reply here.
Back
Top