Are These Two Penny Stocks Worthy?
Customer Questions About Penny Stocks
So, for the last few weeks, Ive been encouraging you to write me back Ive offered to take a look at specific stocks and Ill give you my two cents worth on what I think.
Of course, Itchy and Twitchy My two crackerjack attorneys are asking that I remind you these are not recommendations just my opinion penny stocks are risky and you can lose everything even if I think the stocks are great . And you trade at your own risk.
So with the mumbo jumbo legal stuff out of the way, here we go
Whats Your Opinion On EGLE?
This question comes from Joe D.
Thanks Joe, great question
So lets start from the top
EGLE is the ticker symbol for Eagle Bulk Shipping. Theyre an operator of supermax dry bulk vessels in other words, really big boats to ship goods around the world.
Take a look at the chart
So whats with all the crazy action?
Well, consider the companys history theyve been struggling under a boatload of debt. (Pun intended Ha!)
And on August 6, 2014, they entered into voluntary bankruptcy.
Then the jump you see is the company exiting bankruptcy.
But looks can be deceiving
You see, as part of the bankruptcy, the company diluted current equity holders anyone owning the stock – down to 0.5% of the company and the debt holders took control of 99.5% of the stock.
So if you owned stock in Eagle before the bankruptcy, what you now hold is severely diluted!
The shares you own will be cancelled and new equity shares will be issued to you. Problem is, youre going to get 0.5% of your original holdings thats right you just ran into a buzzsaw that crushed your shares by 99.5%.
Sorry, but thats what happens when buying shares in companies that are in bankruptcy.
As for the new entity if their bankruptcy was done right, the company should be stronger and healthier than before and thats great news for shareholders who buy in the coming weeks and months.
Now, with that said, I cant really judge the stock as it sits I want to see the next SEC filings and financial statements I want to see what the capital structure looks like but no bones about it EGLE is looking stronger than before.
We had another subscriber question
Is Penny Stock Pharmagen, Inc. (PHRX) Still In Business?
This question is form Terry D. who went on to ask Are shares going to $0?
Well, lets look at the chart.
Honestly, its not too impressive. Any stock that traces below a penny is never one Im fond of but well dig in a bit more.
The first place I go is the SEC website looking for company filings.
All Ive got to say is I hope you dont own any of this stock Terry
The first filing I see is a 15-12g filing with the SEC.
Thats the form you use when you want to terminate your listing as a public company. Needless to say, it doesnt look like theres much in the way of a business here and with the current stock price and recent filings to terminate the listings the shares are essentially worthless.
Sorry to break the bad news.
More Questions On Penny Stocks
I dont have much more room for today, but if you have questions on penny stocks you own, or are considering buying shoot me a quick email and let me know what company youre looking at and what concerns you have.
Ill try to get to as many questions as I can!
Profitably Yours,
Penny Stock Research
Category: Penny Stock Tips
