Hey JessStock Traders

I've got a brand new opportunity for you, gone are the days of investing in projects based on their merit, looking at their dividends, looking at their PE ratio, looking at their profits, looking at their ability to absorb more of the totally addressable marketing, looking at how they are innovating.

No, why put in all that guesswork if you still have a 50% chance of failing, why not invest in bankrupt companies and get a 100% chance of making nominal gains through money printing.

How do you get involved in a sure bet like this? Welcome to the IBO, the world is now selling stock in bankrupt companies. Forget if they'll ever be able to turn a profit, invest now!

I don't think you need to be financially literate or a pro at reading of sarcasm to realise that this is a dumb idea, but hey, that's where this financial economy is moving. It wasn't enough to buy pump money into unprofitable companies for years, its now time to pump money into bankrupt companies.

Hertz ATH

Its been no secret that Hertz has been in decline for ages, since their 2014 all-time high of $107 a share, it's taken a nosedive so hard not even inflation could flatten out the fall, so that takes some doing.

The company has been hollowed out for years, but I'm not going to go into that, lets just fast forward to 2020.

Source: Google

Hertz 2020 top

Hetz was moving along nicely in 2020 up to $20.29 a share in early 2020, and as COVID-19 hit, we saw an already crippled company through mismanagement show its hand. Overnight we saw a multi-billion dollar market cap company that has been running for 43 years ago shit the bed in a month.

From its top in February by mid-May, it was already filing for Bankruptcy? How does a multi-billion dollar company fail that quickly? Have no capital to restructure in time and no reserves? Mismanagement, of course.

Source: Google

Hertz getting hurt

Around a week after filing for bankruptcy, a share in Hertz would set you back $0.56, oh how the mighty have fallen. Chapter 11 bankruptcy means the company would mostly be stripped of all its assets for corporate bond holders to be paid first and shareholders would get zero.

Source: Google

Hertz bankrupt rally

What has changed? The company still carries a balance sheet of negative $2 billion in equity, so where is this price rally coming from? Who would be the maniacs buying up Hertz stock and running it up 500% after they said they're bankrupt? WTF???!!!

Is Hertz the first IBO?

Creditors who have ownership over Hetz debt has taken this rally and used it as a means to get their money back. Hertz creditors have asked the court to approve the issuance of new stock in a bankrupt company.

Yes, you heard it an IBO, the initial bankrupt offering is here! This is you buying up equity to get it wiped and transferred to the bondholders of the company oh and don't forget some CEOs may get bonuses for it too.

Physical consumer protection

When it comes to physical products, we have laws against certain things don't put lead in stuff, don't make small objects babies can choke on, don't put toxic chemicals in your beef. Most of it is lip service, in any case, only once they get caught and pay a fine do they care, but hey there's still some semblance of the law.

Financial consumer protection

In Finances, there is ZERO! How can a court approve new shares in a bankrupt company? If its the retail investor or the fed buying it either way that's the transfer of public funds to private hands via a financial transaction, it's plundering someone else's bank account.

I think the limit does not exist

I thought I was being extreme on the Fed expanding its balance sheet by a trillion a month and would push to around 40 trillion. Now that they are opening up to equity purchases, I think 100 or 300 Trillion will be where we end up.

Hyperinflation here we come! Keep watching the gold and BTC price as indicators.

Have your say

What do you good people of HIVE think? Will pricing track accordingly?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

Let's connect

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