Why is there still a bid?
In premarket action the stock is changing hands at $10.04 down $1.37 (-12.01%)
From Reuters:
Electric-truck maker Lordstown Motors says CEO, CFO resign
Lordstown Motors Corp said on Monday Chief Executive Steve Burns and Chief Financial Officer Julio Rodriguez have resigned, days after the electric-truck maker warned that it may not have enough cash to stay in business over the next year.
The company added that its lead independent director, Angela Strand, has been appointed executive chairwoman and would oversee the firm's transition until a permanent CEO is identified.
Lordstown named Becky Roof, who had previously served as interim CFO at numerous companies including Eastman Kodak and Hudson's Bay Co, was named interim finance chief of Lordstown effective immediately....
....MUCH MORE
June 9
Electric Truck Startup, Lordstown Motors Gets a "Going Concern", May Be Headed For Bankruptcy Court
And why is there still a bid?
As the old joke goes, third marriages are proof of the triumph of hope over experience.
Here's an experience anecdote:
....Sometimes markets confuse me.
Back in 2009 I posted a few lines on adventures in short selling:
...Prior to and just after filing for bankruptcy, Northwest Airlines seemed to offer a short opportunity. A friend had me double-check his balance sheet analysis and I ended up selling myself on the idea. The common shareholders would be wiped out and the stock was trading around $1.25. We got the short on. The stock tripled or quadrupled. I started quoting Keynes (attributed) as we threw money at the monster:The airline was actually concerned enough about people buying the stock that they warned against the practice. Here's another NWA post, this time from 2015:
The market can stay irrational longer than you can stay solvent.It worked out, the stock went to zero and I kept quoting Keynes:
“It is the one sphere of life and activity where victory, security and success is always to the minority and never to the majority. When you find any one agreeing with you, change your mind...."There are a few lessons to take away from this adventure:
1) If your timing is wrong you had better be right in your analysis.
2) It is really, really good to have a friendly banker.
3) Keynes talked a lot.
I'm always amazed when the stock of companies that have entered bankruptcy protection continue to trade as if the common shareholders had claims that were anything more than dreams.Cancelled.
Yet it happens over and over again. And can be immensely profitable if you can locate stock to short....
...Here's one of those bankruptcy stories
Northwest's reorganization jolts investors
Updated 5/31/2007 6:14 AM
Anthony Hicks thought he was getting a bargain when he saw Northwest Airlines stock trading for $1.70 per share.
Tempted by that low price, the 39-year-old Detroiter bought 2,000 shares earlier this year, knowing that the airline was restructuring in bankruptcy. It was in bankruptcy that Northwest's stock had skyrocketed from 60 cents to $7.50 in January, on speculation that the company would merge with another airline.Hicks saw that surge and hoped to catch it on a second wave.There was no second wave. What Hicks didn't know was that those Northwest shares would be worthless the day the company emerged from bankruptcy.That day is today. After 20 months of shedding billions of dollars in debt and costs, Northwest is set to leave bankruptcy protection.The airline had warned since it filed for bankruptcy in September 2005 that its stock could be cancelled....The company was warning for twenty months that the stock would be canceled!....
