Shorts losing everything?
Do you understand that the common shares are worthless?
There is no way that anything is going to be left over for the common shares. Going into the bankruptcy the hole was probably over $286 million.
At some point the common shares are going to be canceled and will stop trading.
Even with Newco, there is no guarantee that with no debt the stores would be profitable. I saw one report, of a recent dealer that started a few years ago as a Radioshack independent dealer. He reported that he lost $250,000 to date and in the year prior to the bankruptcy he was just now breaking even for the year.
Anyone who is short, just needs to add enough money to hold onto the position, or pare it down to the point where they can hold onto it. Over the next several weeks, when the auctions are finished and it becomes clear how much additional was lost due to the bankruptcy process, everyone will dump the common shares. Even the bonds are getting wrecked.
The only problem would be a short squeeze, but with millions of shares out there, I do not see how that would be possible.
Louis J. Desy Jr.
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