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Originally Posted by aquaswim47
I was looking at the financials of CHH. It's only down 8% as an insolvent company (a company that has more total liabilities than total assets).
Would such a stock be a good short or should you use puts to protect you against unlimited upside risk. I think that people should use a stop-limit order to limit losses from a short-squeeze.
Looking for opinions. What happens if the company files for Chapter 11 bankruptcy protection? Is it equivalent to Chapter 7 or is there a risk that the stock could rebound (15% likelihood) and wipe out your short position (or your portfolio)? Any way to sell the stock back to the broker for between a penny and a nickel per share to safeguard against any possible turnaround? I am wondering if people have ever shorted a potentially bankrupt company (or if that's too risky).
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Recent SEC filings I'm looking at they have current assets and opperating income well over current liabilities. Is there some other data out?
Insolvency is where a company can not meet its debt obligations, not just more liabilities than assets.