Something Is Wrong With This

June 09, 2020
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At the end of trading yesterday there were 141,973 accounts on the Robinhood stock trading app holding Hertz (HTZ) that has filed for bankruptcy protection.

Yet the stock is up over 650% since that announcement. The Robinhood User Interface (UI) provides no indication that Hertz has filed under Chapter 11. Not even a “Bankrupt” tag.

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Here is another:

Yesterday on the eve of the bankruptcy, Chesapeake Energy (CHK) stock closed at 69.92. The stock was up 171% yesterday to a market cap of $650 million. Last Thursday it closed at $14.05 and then closed at $24.80 on Friday.

After the close they announced the preparation of a chapter 11 bankruptcy and will hand the keys over to the bondholders. This is not new news!

Below is a chart of a $2.2 billion bond that’s due on January 1, 2025. It currently sells for 5 cents on the dollar.

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And another:

Nikola went public via a Special Purpose Acquisition Company (SPAC) and changed its ticker from VTIQ to NKLA. The Company bills itself as the Tesla of trucks and has ZERO revenue but has a market cap of $30 Billion.

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And finally:

JC Penney (JCPNQ) was up 114% yesterday – they filed for bankruptcy on May 15th.

Buyer Beware

When a stock trades with a “Q” at the end of the symbol it signal bankruptcy per SEC guidelines.

And when a company files for bankruptcy typically the stock holders get wiped out!


Stay Tuned, Disciplined & Patient! {TJM}

The Investor & Character Equation (ICE) | S + R = O


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