Are reverse splits tradeable?

Stocks seem to almost always go down during the week following the action. Anybody have access to the data? Too simple to be real I would think.

Yes they are but they are liquidity constrained for institutional investors and some can rip your face off. It depends on the circumstances around the split. If it is a debt-laden piece of crap trying to stay listed on a major exchange, typically you can short that. I was short HNSN prior to the reverse split and added to it on the split, down >40% now. Buh-bye!

In general, shorting penny stocks is a bad idea for 99% of investors. Most reverse splits occur in penny stocks. Act accordingly.

Also, aggrivatingly, the exchanges implicity support microcap stock frauds by providing an endless number of opportunities to retain listing on a major exchange. It’s pretty hard to get kicked off the exchange, you really need to try hard for that to happen.

CPST and BTU recently. HK on Dec 28. Shorted BTU just because I was already long the bonds. Maybe go naked HK. Looks to fit your criteria. Didn’t have the balls for cpst, but it dropped like a rock. HK debt not traded. I don’t trade short term much, but if a good risk reward presents itself I’ll play. Same view on arbitrage. Made some easy money on debt conversions.

CPST is a perma-turd. You can short that stock any time it has a big up move. Worthless. Embrassing for the SEC. Disgraceful for America’s capital markets.

-$815,620,000 in lifetime losses. Jesus Christ, someone do something about that.

Great spin to their story though. For the life of me, how can they not make a business out of those turbines or at least sell the distribution network, if it really exists. Maybe it is just a shell…

27 years profit free. quite an acheivement.

It’s unclear why these are even allowed to exist. And this is not an outlier, there are hundreds of floaty turds like CPST. That $800+ million could have been funneled to something productive but instead it was stolen and paid to insiders. Kind of sad when you think about the broad reaching impact that level of theft has on the US economy, especially when repeated across dozens of fraudulent companies.

I looked at it briefly, but I have 2 questions. 1, where is the money coming from after all these years and 2, where is it going?

It’s coming from dilutive equity financings and who knows where it’s going, but clearly not to shareholders. I’m sure if you look into it you will find that it’s a head insiders win, tails shareholders lose type of scenario. Don’t worry though, markets are perfectly efficient at all times.

markets are only barely efficient for securities that are widely held. securities like CPST will always be inefficient due to a contingent of stupid investors and/or gamblers. if bro and I were the only two people trading a given security, it would be inefficient. no, let’s be serious. we’d agree on price perpetually and would acheive maximum efficiency.

I, too, dream of cornering the stock market for unlimited personal benefit.

mmm unlimited. sounds infinite. like god.

It’s quite incredible to me sometimes how many retail speculators (as opposed to investors) there are out there who will trade in penny stocks they literally know nothing about. The logic goes something like, ‘wow this thing trades for 50c when only last year it was at $10, it must be a bargain!’. Even though the company could well have an intrinsic value of essentially zero. Once the market cap gets small enough that it is below the radar of institutional investors and professional research firms, you really enter a twilight zone of often bizarre levels of inefficiency.

I would say it’s nearly certain the intrinsic value is zero. It’s not even an interesting debate imo.

The worst investors are those who think they know something but don’t really understand how the pump and dumps work. PLUG was a harrowing capital markets experience for many novice investors.

Agreed though, the small part of the market is the twilight zone. There are a significant number of mispriced longs as well.