#ENCORE ENERGY STOCK TICKER DRIVER#

While this benefits many stakeholders (customers, debt holders, employees), it usually comes at the cost of common shareholders. Chapter 11 exists to allow companies that got in over their heads to settle their debts without disrupting operations. Normally, avoiding “Chapter 11 stocks” (companies in bankruptcy) is a no-brainer.

#ENCORE ENERGY STOCK TICKER DRIVER#

The stock trading app’s users were a major driver of Chesapeake’s prior epic rally. That is to say, there’s no longer a Robinhood factor to consider. With shares now trading over the counter, fewer retail investors can trade the stock. From mid-May to early June, shares went from single digits to more than $70 per share.Ĭould we see a second round of these irrational rallies? Don’t count on it. If you recall, shares traded wildly in the weeks before its bankruptcy announcement. Granted, today’s valuation isn’t as irrational as it was when shares still traded on a major exchange. Yet, this hasn’t stopped speculators from propping up Chesapeake stock. While there is some opportunity for those buying the company’s unsecured notes, there’s no rational reason to buy the equity.Īt the end of the bankruptcy case, the current common stock will be cancelled. Or, at least, check out the analysis available online that breaks down what’s next for Chesapeake in Chapter 11.Īs this commentator wrote earlier this month, shareholders should expect no recovery once the company’s Chapter 11 bankruptcy wraps up in February.

But, before taking even a long-shot gamble, they should read the fine print. Speculators may think they’re buying a lottery going long CHKAQ stock after its bankruptcy filing. If you haven’t bought in yet? Avoid it completely. If you own shares, sell now, while they still have some value. But in the case, it’s pretty obvious that the common stock will be worthless once bankruptcy proceedings wrap up. So, despite this dire forecast, what’s with shares still retaining value? Sometimes, there’s a remote possibility there’s some value left for shareholders.

10 Gaming Stocks That Will Power Through the New Normal.And, with said equity likely worth less than the par value of the debt, shareholders aren’t getting a dime. In Chapter 11, chances are the company will meet debt obligations by giving debt holders equity in the company. In short, with not enough to pay back debt holders, forget about anything left for shareholders. And, with oil prices still depressed, the value of said assets may be less than what they’re worth on paper. Simply put, the company’s liabilities vastly exceed assets. But, when’s all said and done, consider zero the long-term price target.

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