Replies to post #31130 on Sunedison Inc. (fka SUNEQ)

[Handyman4545]

I read that commons surviving.

It's actually better than that (10% +/-) according to the SEC.

A fallacy in the business market is that all companies that declare chapter 11 come out wiped totally clean.
No debts, no stock, no value.

The truth is that nearly all that come out solvent, still have some debt load but it's much more manageable than it was allowing them to continue business and profit generation but with the saving grace of past failure experience.
A few of those oopt to protect their unsecured investors by retaining their stock through the process.

If they do, typically, the stock emerges greater than where it was during the fall and relief restructure period but far less than what it was in its height because of investor wariness regarding the new direction of the company and the fact that it probably sold off a lot of it's assets to reduce its debt.

Sorta like.

"Ok. We knew you when, and we had a lotta faith.
We know you don't have squat now but we believe you can do it again but did you learn anything from the fall?"

This makes it a great way to recoup any losses you might have suffered during the fall.

In my limited experience, investing $10 or $100 in bankrupt companies is a lot like investing in the lottery but odds are what make the difference.
The biggest difference in chapter 11's over lottery tickets, is that you can actually find what you need to know to improve your odds via the court docs with chapter 11's

It's arguably, Gods will in the lottery.

[Handyman4545]

If I were a broker, and I knew that you had $50,000 tied up in SUNE because I advised you to buy it then and the stock dropped to $0.1000 (or lower) and I had no POR stating an actual dissolution and reissue of SUNE stock (this is really important because there isn't at the moment), I'd call you and advise you to "GAMBLE" (note the stress here) $1,000 more on the stock with an understood $500 probable additional loss.

Here's the reason.

One of two things will happen with SUNE:

1) Assuming the company does emerge, existing stock intact (because it was protected in the POR), at $10/shr you benefit immensely with no down side at all because you applied "stock cost averaging" (see previous post math).

2) Assuming the company files a POR that states a dissolution of existing stock, the stock will still trade on the market for a while afterwards. I'd call you and tell you we didn't win this one, sell out now at $0.05 (or what ever) and walk away with a little more loss than you knew you had before the buy.