I was hawking it as they worked their way toward "resolution" of the problems in the first effort... watching that unfold, and seeing the way they shifted focus in finance at that time... more than enough to wave me off.
I always try to follow things to the bitter end... through the bankruptcy... and to see what happens to the assets in the aftermath of a failure... an exercise that has taught me quite a lot about business and the markets.
Sometimes, obvious failures in waiting are obvious to everyone but those pumping at the launch who are still trying to use CPR to keep a dead elephant alive. Say, Molycorp... a scam from the start ? Other times, the BK seems to have little real impact on the business... with the business surviving handily... only too often under wholly new ownership with the original shareholders the only ones suffering at all. Say, Eddiie Baur ?
Often enough, the transitions are deliberate... a set of assets is created and then parted from those who paid for them to transfer them to others... which can happen as a function of purposeful management effort intending to use the public market to fund assets intended to fall to private market backers with failure.
If the business works the lenders aren't going to get hurt, in any case...
But, then, there is occasionally an off chance that they'll actually pull it out... without zeroing out the original shareholders... and that's why I bother with following things like this. If you were hot on it in 2013 above $1 or as it went on sale when falling though $1... there seems little reason to be less hot on the potential, now, when its trading in the pennies... except, of course, the potential that even at sub-penny prices the investment could evaporate by 100% without notice, depending on how the BK unfolds.
Could prove to be one of those where you have to ask... how many times ya gonna stub your toe before you quit wearing sandals in a lava field ?
I do hope they make the tech work, and make the business work... but, hope is not an investment strategy.
|
