can someone help to advise, so with the DIP loan, that means ATPG going towards BK, and that would mean shareholders would ended up with worthless shares? and, why are there still people buying out there? should I sell all the ATPG shares now at a great loss? thanks!
Man, please don't fish a yahoo board for investing advice. There are way too many vultures. Only you can know if you like the risk/reward proposition of any given investment. ATPG represents a lot of risk.
DIP financing only comes into play if they file for a BK. All that bloomberg article said was that they have lined up Credit Suisse to lead that financing. It's certainly a clear signal that they will file, but no one knows for sure until they do file.
BK would mean shares are worthless. Someone buying now are hoping for miracles - risks are high and potential rewards are high too.
My sense is that the situation is hopeless - no suitor for the debt-laden company and the likelihood of DIP is quite high, just a matter of time. The debtors face loss too, why would they pity the shareholders?
Short covering, the fact some people still are not convinced, until details are out some will continue to believe the common will have some value, MM's need to manipulate the price a bit, lots of reasons possible, 50 cents is no great shakes and it will go lower
Look at Patriot Coal PCXCQ from July 6 through today(July 9 was the BK news day and then official JULY 10) 2.19 7/6 .61 7/9 .22 7/10
9 out of 10 common shareholders get wiped out after a bankruptcy. Your best hedge is to wait for this thing to hit rock bottom and load up on bonds. Bondholders always get par value or very close to it....bonds are trading at $34 right now, but they'll prob hit the $10s right before bankruptcy.