Shorting stocks: Broken stocks - Analysis Message Board

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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis

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To: drakes353 who wrote (900)	2/28/1998 5:41:00 PM
From: taxikid	Read Replies (1) of 2506

you are ref. to subordinated debentures. I was ref. to a specific "floorless" debenture.. which looks to me like an extremely safe "junk bond". sometimes companies do it because they are in dire need, sometimes they do it and like EA was referenced to in a previous post, that co officers had done this offshore thing, it looks fishy, but would you not be interested in being on the buy side(of the bonds)? Do not ASSUME that all circumstances are the same... while this stock has a little room to fall the outstnding float is small and an increased short position could push this stock higher, especially since a three day spike to $10 would margin out most shorts. the RISK vs REWARD is what i was discussing. lotsa risk, what do you think the reward is on a stock that the bondholders will snatch up @ 1.50-$2.. that tells you there is a bottom on this short.. so you risk "limitless"{let's be reasonable- let's say the cap on a heavy squeeze and combined "good news" pr blitz is $15) you risk $9 to maybe@ best get back $4. The odds are stacked against you. especially if a pump and dump broker sees the short position go up.. taxi~ BTW i could go on and on about s3 regulations and BONDS, but i think the point would only be that i waste my breath explaining them to you. glad you can jump on the bandwagon and assume all junk bonds signify the death of the company. I guess there would be no innovative small companies, if your assumption is correct.

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