Meanwhile, stock price up another %6+ today.
But, noooo you don't understand its all a trick. This is just some complicated chess game where the Co has chosen to file for BK post-Oct 17, instead of pre-Oct 17.
Have a lovely weekend.
Also, in theory, as a stock price declines after a short sale, you need less and less margin to maintain your position. However, with my example your minimum margin requirement would still be $5.00 a share.
I will explain this to you one more time.
Max return for a short sale. If I shorted 100 shares of KKD at $10.00, I will receive $1,000 into my account. To short that amount I will have needed to have $500 of margin money available. In theory it didn't cost me $500 to short, that money just had to be reserved to maintain that position.
Now, if KKD goes to zero and the stock is cancelled (the best a short could do) I will have profited the full $1,000. For my margin requirement of $500.00 I will have earned $1,000. 200% return on my margin.
Does that explain it simply enough for you?
Why do I say KKD has been through the ringer?
I think that's pretty self evident. Can't seem to keep a permanent CEO, all the filing delays, SEC investigations including the U.S. Attorney General's Office in New York, stupid diet crazes like Atkins, dropped from the S&P
MidCap Indice, franchisees filing BK, shareholder lawsuits, resolved or not that's enough to bury just about any stock issue.
I don't want to get into a math debate with you, but your theory on a max return of 200% if I shorted a stock doesn't pan out.
If I shorted GOOG @ $350 and it dropped to $1 and I subsequently cover. That's more than 200% my friend.
I have a real hard time with posters trying to condone corporate malfeasance. When it's all said and dnoe KKD should pay back the billions of dollars they have stole from shareholders before being allowed to continue as a going concern.
As it is shareholders will end up paying again for nothing they have done...
Theoretically 200% is the max return you could acheive if you shorted a stock and it went to zero.
Why do you say KKD has been through the ringer? Has the SEC charged them yet, or dropped the charges? Have the criminal charges been filed or dropped? Have any of the lawsuites been dropped?
If there is a ringer that KKD needs to go through, I would say it really hasn't even started yet.