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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: I have a couple of stocks which have effectively gone to $0 a couple of years ago. But, I'm not sure why they're still listed in my margin account, if they're worthless.

My broker is offering a service where I can donate the shares to them, and then officially declare a tax loss. I'm thinking of taking them up on this offer, but I want your opinion, just in case either of these stocks still has some life left in it (or if I'm not understanding the $0 valuation properly). For example, the assets of Bellatrix Exploration (oil and gas) were taken over by another company. I assume this was some kind of bankruptcy sale.

Is it safe to say that with a reasonable probability that the shares of both Bellatrix and Distinct Infrastructure are effectively worthless?
Read Answer Asked by Ed on October 22, 2021
Q: I know DUG has had its negative issues but the death spiral down shows no end in sight. For all their problems they seem to have solid revenue and I didn't see bankruptcy on the radar but the price action seems to suggest some are worried. If I wait this out and the next few quarters shows a pulse I would think there is tremendous upside from here. Or would you suggest I cut my losses and sell under the "hope is not a strategy" principle.
Read Answer Asked by Morgan on October 24, 2018
Q: Sorry one company but multiple questions. I know you don't follow Distinct Infrastructure Group closely, but after seeing in Q&A was looking at for a microcap, but after looking to more, almost feel like trying to short. Wondering if you have time to look at a couple of questions.

1) Management took out an expensive $20M loan for acquisitions, made one acquisition for <$3M, took >$1M in Goodwill and the business lost >$200K in 2016. In 2017 they are refinancing and consolidating the acquisition loan into general corporate debt. What do you think of this?

2) The have seen material deterioration in income statement and balance sheet, and continue to issue a large number of shares. Is this normal to grow the business? Or sign that business will grow in size but not achieve profitability with that growth?

3) Do you have any data on material insider buy or selling in past 6 months?

4) Do you see any great risk in shorting specific to the company? ie. control of float being able to influence stock price even with deteriorating fundamentals vs general risk by definition asymmetric upside/downside when shorting
Read Answer Asked by John on May 01, 2017