Zalemark Holding Co Inc (ZMRK)

[fact-checker]

Telltale signs of an impending bankruptcy. Part 4.

All of the signs lead to a Zalemark bankruptcy.

From a USA Today article by financial writer Matt Krantz.

•Notice of alternative strategies. When business continues to worsen, the company is faced with the uncomfortable situation of seeing what options it has. You'll typically see a very cryptically written press release that says the company is pursuing "strategic alternatives." The company often tries to imply it might be bought, but usually the odds of that are small.

•Press release discussing debt restructuring.These press releases try to put a positive spin on a dismal event. Typically, they discuss how the company will be looking to lower its debt load. That's good news for the company, but bad news for shareholders because it means they will likely lose everything.

As you can see, there are many phases of the typical company's downward spiral before shareholders are wiped out. It can take years for a company to cycle through all the steps, giving investors who are paying attention plenty of time to get out. Yes, there are exceptions and some companies can fall apart much faster. Companies like Lehman collapsed in weeks not years.

Even so, if you're going to invest in individual stocks, you need to bear the risk that a company you own may fail. You need to pay attention, or take the unnecessary risk of losing it all.