Protagenic Therapeutics Inc. (PTIX)

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Distressed securities are securities of companies or government entities that are experiencing financial or operational distress, default, or are under bankruptcy.[1] As far as debt securities, this is called distressed debt. Purchasing or holding such distressed-debt creates significant risk due to the possibility that bankruptcy may render such securities worthless (zero recovery).[2] Distressed securities tend to trade at substantial discounts to their intrinsic or par value[1] and are therefore considered to be below investment grade.[1] This usually limits the number of potential investors to "large institutional investors—such as hedge funds, private equity firms and investment banks."[2] In 2012 Edward Altman, a leading expert on bankruptcy theory, estimated that there were "more than 200 financial institutions investing between $350-400 billion in the distressed debt market in the U.S. and a substantial number and amount operating in Europe and in other markets."[3]