Arch Coal Inc. (fka ACIIQ)

[LouisDesyjr]

Most of the buyers are dumb? Unfortunately yes

It is an absolute certainty that the common shares are going to be wiped out. Under bankruptcy law, the common shares are the lowest in priority for claims on the assets of the company, and the company is hundreds of millions of dollars negative on equity, maybe as much as $1 billion or more negative.

There is no way the existing common shares are going to survive the bankruptcy.

Today's rise in price was because of the DIP financing that was put out in a press release. People are buying because they think the DIP financing increases the chances of saving the existing common shares, but instead it will push the common shares further away from any chance of recovery because the DIP financing will be ahead of the existing common shares also. People who are buying today do not understand the process or how bad off the company is. The only thing they are doing is giving someone else a chance to get out of the stock with a little more money than if they held on.

Louis J. Desy Jr.