Day 9 - The last day of Education covers Specific Risks in relation to Listed US companies.
Key Takeaways
There are 4 types of risks
1) Unexpected suspension of stocks
a) Important news announcement
b) Too volatile - suspend for 5 minutes to allow traders to cool off
c) SEC suspension and possible revocation of listing. Eg is Luckin Coffee
2) Delisting risk of listed companies
a) Direct delisting - no longer listed and shares become "waste paper"
b) OTC or Pink Sheets - shares can still be traded but not so liquid and no information on company. Eg DiDi's recent delisting
3) Bankruptcy Risk
a) Chapter 7 - asset liquidation. Investors will probably get nothing
b) Chapter 11 - debt restructuring. Company can still continue to operate
4) Privatisation - Eg Twitter. Caution on short sellers - shares silently liquidated
A Huge Thank You to @Tiger_Academy for these 9 days of Education. I have learnt so much from you and very grateful for your time and effort in compiling the lessons.
Comments