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Strategies & Market Trends
Shorting stocks: Broken stocks - Analysis
An SI Board Since May 1997
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Emcee:  Q. Type:  Unmoderated
Introduction Compact
A broken stock is defined as having ugly financial statements plus a very low RS (relative price strength). The co. is often struggling to stay afloat. Fundamentals typically include negative cashflow and earnings, plus low levels of working capital or shareholders equity. A small market cap < $150 M is of greatest interest, as it places the troubled co. at risk of failing due to an inability to raise equity. These stocks usually have prices <$15.

Broken stocks often have one of these characteristics:
* liquidity problems
* obsolete products
* development stage companies where the product hasn't done well
* severe competition
* enormous capital spending requirements
* big assets of little value
* violations of bank debt covenants
* an auditor's report with the 'going concern' qualification

Broken stocks with especially serious problems include those with:
* discounted convertible financing (offshore Reg. S private placement)
* net tangible assets below the delisting threshold of the exchange.

Stocks discussed in this thread should be analyzed using SEC filings sec.gov & other sources of fundamental data.

The root for this group of short selling threads is:
Subject 15249
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2506To value development stage companies, especially drug companies, the best ratio Q.-3/19/2001
2505My favorite shorts right now are companies that do not rally when the Nasdaq doetradermike_1999-3/19/2001
2504Try some of the Canadian brokerage firms.Chopper-3/13/2001
2503Anybody know what if any brokerage firms short BB stocks over 5?maxcdt-3/12/2001
2502INTC shorts are feeding tomorrow. Where will they cover?Texas77-3/8/2001
2501Hello N, Yes it has been a while, but I stick my head in from time to time. StilVincent Ramirez-3/7/2001
2500N, looks like another R/S in APGR now ARCH is in the make? The stock trades faRockyBalboa-12/27/2000
2499Terry, I'm not sure if you can beat Schwab's $30 commission by a signifiQ.-12/23/2000
2498What broker do you use? I can't get fills on smaller cap stocks with prices Terry Thomas-12/22/2000
2497N, Congratulations on a very profitable trade. I made the poor decision of not fchester lee-12/22/2000
2496I covered my tax-loss selling shorts for a 52% gain, vs. 3% for the Russell 2000Q.-12/22/2000
2495Vince, I just now realized who you are. It had been so long that I didn't imQ.-12/12/2000
2494I am interested in information on brokerages best suited for shorting stocks. IBedrock-12/12/2000
2493re. <<Shorting a stock at $25/32 ? What am I missing?>> what's Q.-12/12/2000
2492Shorting a stock at $25/32 ? What am I missing? regards, VinceVincent Ramirez-12/12/2000
2491here are my first 3 shorts for tax-loss selling this season. I think they are alQ.-11/28/2000
2490Don't forget a lot of profits from late 1999 that were carried over to JanuaDale Baker-11/24/2000
2489<i>"which is usually a strategy to offset large capital gains</i&gMama Bear-11/23/2000
2488Ñ, Thank for running the screen. My premise of a heavier than average tchester lee-11/22/2000
2487yahoo.cnet.com Reverse splits aren't always reversals of fortune By Dawn RockyBalboa-11/22/2000
2486I did a screen for stocks that are likely to suffer some tax-loss selling pressuQ.-11/20/2000
2485Stocks to short JNPR JDSU (SINCE 130) CIEN BRCD NTAP RIMM HAND The list is laDAVID BANISTER-10/24/2000
2484Yes, Chester, I plan to run a screen for broken stocks, perhaps in early NovembeQ.-10/10/2000
2483Ñ, A screen for this years losers should produce many good candidates for chester lee-10/10/2000
2482Come'on.... This "tread" should b' doin' it..<lol>, Chartgod-9/8/2000
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