tag:blogger.com,1999:blog-1527840491496268397.post5877517566040615696..comments2024-03-08T11:20:30.095-07:00Comments on Credit Bubble Stocks: Time to Put the Energy Conversion Devices ($ENER) Capital Structure Trade Back OnUnknownnoreply@blogger.comBlogger10125tag:blogger.com,1999:blog-1527840491496268397.post-56945905419348469762012-01-19T18:24:36.752-07:002012-01-19T18:24:36.752-07:00Anyway, there is nothing really that a creditor of...Anyway, there is nothing really that a creditor of a money losing business can do until there is an event of default, e.g. failure to pay interest or principal as it becomes due. <br /><br />That is why when you look at the recovery analysis on a distressed bond, you have to think about how long the company will keep losing money before they can be convinced to liquidate. <br /><br />A common creditor tactic is to give management a stake in the reorganized company, which can be thought of as a bribe to get management to begin representing the creditors' interests rather than the shareholders. <br /><br />That is why it is common to see restructuring plans where management gets 5-10% of the new equity.CPhttps://www.blogger.com/profile/12701174164478027499noreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-30283827153017627572012-01-19T18:20:23.057-07:002012-01-19T18:20:23.057-07:00Theoretically, creditors can file involuntary bank...Theoretically, creditors can file involuntary bankruptcy petitions, but in practice that never really happens.<br /><br />For one thing, if the creditor contests the involuntary petition, the petitioning creditors have the burden of proving that the debtor is not paying its debts as they become due. <br /><br />If a court dismisses an involuntary petition, the petitioning creditors can be liable for damage claims, such as attorneys' fees or compensatory damages due to trade disruption.CPhttps://www.blogger.com/profile/12701174164478027499noreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-12067438146066500942012-01-19T17:32:49.703-07:002012-01-19T17:32:49.703-07:00Any idea why the bond holders haven't gone to ...Any idea why the bond holders haven't gone to court and forced the company into Chapter 11 yet? The current management obviously can't be taken seriously - for example, the new CEO is on record saying that only glass PV can be cost effective (ENER uses steel & plastic!) and that any PV business that relies on selling modules for $2/Watt or more is unsustainable (ENER's cost of manufacturing is above $3/W!!!). And the "Chief Restructuring Officer" hails from a fraud and most recently lied that the non-solar business would be sold within 6 months of 7/19, that is by today.ECD Fanhttps://www.blogger.com/profile/15715193842462262988noreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-34274189887333800832012-01-19T09:41:37.934-07:002012-01-19T09:41:37.934-07:00I need to open an account. None of the discount eq...I need to open an account. None of the discount equity brokers offer the opportunity to trade these kind of corporate debt securities. I was asking to see if there was a better brokerage option for the small investor.Taylor Conanthttps://www.blogger.com/profile/18270678440957992085noreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-687201941588677892012-01-19T09:36:53.176-07:002012-01-19T09:36:53.176-07:00I don't think so.
Are you not seeing this bon...I don't think so.<br /><br />Are you not seeing this bond offered on the electronic markets there?CPhttps://www.blogger.com/profile/12701174164478027499noreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-89375962520051911052012-01-19T09:12:28.853-07:002012-01-19T09:12:28.853-07:00Is there a better brokerage for small investors to...Is there a better brokerage for small investors to trade corporate bonds than Interactive Brokers?Taylor Conanthttps://www.blogger.com/profile/18270678440957992085noreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-69718155064626280442012-01-19T08:57:45.481-07:002012-01-19T08:57:45.481-07:00Traded a piece today at 41.5
http://cxa.marketwatc...Traded a piece today at 41.5<br />http://cxa.marketwatch.com/finra/BondCenter/BondDetail.aspx?ID=MjkyNjU5QUE3CPhttps://www.blogger.com/profile/12701174164478027499noreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-46887732075803042352012-01-19T08:55:30.391-07:002012-01-19T08:55:30.391-07:00The best way to get short equity exposure here is ...The best way to get short equity exposure here is to short ITM calls. I don't think you can short the stock, and you'd be paying a premium to buy puts, vs receiving a premium when selling calls.<br /><br />To do the arb there is no substitute for owning the bonds. <br /><br />As a distant second, you could own something else solar, like FSLR. Or related is inverter maker PWER which is correlated and is super cheap assuming solar demand holds up.<br /><br />What is astonishing is the volume in ENER. The entire company has changed hands this week.CPhttps://www.blogger.com/profile/12701174164478027499noreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-61510531152283808282012-01-19T08:53:07.359-07:002012-01-19T08:53:07.359-07:00I agree w/ Taylor - how does one (small investor) ...I agree w/ Taylor - how does one (small investor) get involved with the long convertible notes?<br /><br />Can you provide a link to a quote? I can't even seem to find a quote for the converts...WSMhttps://www.blogger.com/profile/00131532131659441620noreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-84775501231164052782012-01-19T08:45:25.451-07:002012-01-19T08:45:25.451-07:00CP,
I think this is a robust idea. One can buy pu...CP,<br /><br />I think this is a robust idea. One can buy puts, short calls, write calls or try shorting the stock itself to play the short side of the equity hedge. What is the easiest, most cost-efficient way for a small investor to get exposure to the long side of the credit hedge in your mind?<br /><br />Apparently lightning does strike twice in one place!Taylor Conanthttps://www.blogger.com/profile/18270678440957992085noreply@blogger.com