Edit / Celeste
Since the global outbreak of the epidemic, people have been isolated at home to avoid drugs, and the physical industry, which relies on the flow of people to make a profit, has been hit hard. Tourism, catering and physical retailing bear the brunt; oil prices avalanche due to reduced economic activity, oversupply of energy and production reduction agreements not negotiated by OPEC+Oil-related companies have also undergone structural changes.The self-employed closed their doors quietly, and even many listed companies declared bankruptcy. Among them, there are many enterprises that are familiar with it, such as tourism car rental companies.$Hertz (HTZ.US) $, retailer$Penny Department Store (JCP.US) $等。
Violent rebound
Recently, with the gradual opening up of US states and better employment data, the economy seems to have taken a turn for the better. Us stocks ushered in a wave of strong gains last week, with the tech-dominated index$Nasdaq Composite Index (.IXIC.US) $But also took the lead in completing the so-called "V-shaped" recovery. The sectors that have been hit before have rebounded most strongly in this bull market, with high hopes for an economic recovery. These bankrupt stocks are on the skyrocketing list, and some have more than doubled:
1.
Hertz, which filed for bankruptcy protection in late May, soared 115% in intraday trading on Monday, and trading volume soared tenfold. It soared by more than 400% in just three trading days. The good times did not last long. Today, there was a sharp correction, and the circuit breaker was triggered four times in intraday trading. As of press time, it fell 17% to US $4.59, still 1047% higher than the historical low of US $0.4.
Hertz, a century-old car rental giant affected by the epidemic, filed for bankruptcy in late May.After filing for bankruptcy, the share price plummeted 80% a day, hitting as low as $0.40. Based on the bankruptcy protection application filed in Chapter 11 of the bankruptcy Law, the company can continue to operate while making a debt repayment plan and striving to improve the business.
Hertz car rental has been in talks with lenders and the U.S. Treasury about the possibility of a bailout. But because of sluggish demand, a large fleet and falling prices for used cars, Hertz does not have enough liquidity to sustain the market recovery.
Source: Futu Securities
2.
At an oil price of $20, 533 US oil exploration and production companies will file for bankruptcy by the end of 2021, according to Rystad Energy. April 1st,$Whiting Petroleum Corp. (WLL.US) $Yu announced that he had applied to the court for bankruptcy reorganization, becoming the first company to file for bankruptcy reorganization because of the crude oil price war. Before bankruptcy, Huaiding Oil was saddled with $3.6 billion in debt. With oil prices plummeting, its income is no longer enough to repay its debts on time.
The board believes that financial restructuring is the "best way forward" for the company because of the sharp decline in oil and gas prices as a result of the oil price war and the related impact of public health events on demand, Whiting said in a statement.
Whiting oil has risen 835% since April 1, but fell more than 25% on Tuesday.
Source: Futu Securities
3.
Penny Department Store, as a century-old American brand, has filed for bankruptcy protection in accordance with Chapter 11 of the US bankruptcy Law because of its heavy debt. Penny, which is headquartered in Texas and was founded in 1902, employed about 90,000 full-time and part-time workers as of February.
Although expensive as a century-old store, Penny's is not an old-fashioned player: Penny's is the first large physical department store in the United States to try to sell goods online. However, these reforms ended in failure. Sales at Penny's have declined year after year since 2016. It now has about 860 stores, less than 1/4 of the number in 2001.
Penny's has risen 167% since it filed for bankruptcy protection on May 15th.
Source: Futu Securities
Retail promotion
The rise in bankruptcy stocks was partly driven by retail investors, especially young people. Trading activity in bankruptcy stocks has surged, according to Robinhood, a brokerage that tracks a concentration of retail investors in the US.
Source: CNBC
Expert evaluation
CNBC's Jim Kramer (Jim Cramer) said in a tweet on Tuesday: "Please don't be in Hertz or$Chesapeake Energy (CHK.US) $Get hurt (of stock)Because common shares have the lowest priority in bankruptcy, they are more likely to be worthless.」
Peter Boockvar, chief investment officer of Bleakley Advisory Group, said: "it's great that Las Vegas [casinos] are open again, but who needs to gamble when you own casino stocks?" "
"after the collapse since March, we now have a clear bubble in some markets. We know that this level of speculation coincides with a sharp increase in retail investor activity. "Boockvar added.
Editor's note:Under US law, when a listed company ceases to operate and liquidate, shareholders may be entitled to some assets, depending on the type of shares they hold. But the stock itself is usually worthless. The owner of common stock ranks last in the order in which the company liquidates assets.
In Chapter 11 of the bankruptcy law, anyone who owns shares in a company will determine how the company will be restructured and who will be paid. In debt restructuring, debt investors will be given priority when issuing new shares in a restructured company and restructuring bonds. Equity holders may receive some of these new shares, but the procedure in Chapter 11 usually erases the value of their holdings.
Take Whiting Oil Company as an example. The company's shares closed at 85 cents on Thursday and have since soared to $2.21.
However, in the agreement between the Denver-based oil company and its bondholders, 97 per cent of the new equity resulting from the restructuring will go to Whiting debt investors, while only 3 per cent will go to existing Whiting holders.