This is how dumb average retail investors are: TWTRQ up 1300% and counting

[yuli]

https://www.google.com/finance?q=OTCMKTS:TWTRQ

The ticker TWTRQ is that of TWTR Inc, formerly Tweeter, a home electronics retailer who is now in bankruptcy proceedings.

Due to Twitter's filing of its S-1 last night and revealing their ticker symbol of TWTR, people are buying this bankrupt penny stock in droves thinking they are buying into the IPO.

Do what you want with this information, but just know that like all tickers ending in Q, the underlying company behind this stock ticker is going through bankruptcy proceedings and the shares at some point will be delisted and worth nothing (see Eastman Kodak a few weeks ago for an example)

edit: this seems to be a decent indicator of the demand for the actual IPO, and might be worth a little bit of spec money in the real thing. I personally will be gambling (yes it is gambling) with a decent position of the IPO on opening day.

Barring a technical fiasco like the FB IPO, I believe the risk/reward is in the buyer's favor due to insane demand and hype and I expect a likely pop even from market price of the IPO.

Current estimates are Nov 7th for the IPO, if not they are shooting for Nov 15th

 

[promiseb]

@yuli 0TC employee here. We're all in tears.

 

[yuli]

@promiseb That is hilarious.. did anyone have the foresight to see this coming and play it? Assuming of course employees are allowed to trade normally.

 

[promiseb]

@yuli We don't know anything that's not already public information.

1) It's bankrupt.

2) In addition, we haven't been able to contact them, so on top of being bankrupt, we don't even know if they exist anymore. They will probably be de-listed at the end of the billing cycle

3) We didn't think anyone would be stupid enough, so the thought never even crossed our mind.

 

[yuli]

@promiseb Wow I wonder if it actually delisted just now... I don't see any ticker updates since 12:42

Would it be in the interest of the company who acquired the bankrupt assets to delist immediately to take advantage of something like this? Do they keep the "value" of these shares?

 

[promiseb]

@yuli When a smaller company like this goes bankrupt, the assets don't stay around in any sort of organized form. People are owed money, and so after bankruptcy, the assets are all sold off and paid to the creditors separately. 99% of the time, the stocks are cancelled and are worthless. Occasionally, investors might get back a few small percentages of their investment, but this rare since creditors are the first to be paid back.

Your understanding of stocks is also flawed. Even if the company did stay around, the money from the original offering is already gone. Aside from issuing additional stock, any changes in the stock price after the offering has no cash effect on the company. Plus, to de-list the stock, you need to be the owner of the company. To be the owner, you need the stock. To get the stock, you need to buy it. And in this case, there is no money left to buy back the stock.

For reference, Dell had to spend $24 billion to buy itself and de-list. You can't simply de-list at any time and screw over the investors, unless you're bankrupt of course.

 

[yuli]

@promiseb Awesome explanation.. thanks!

 

[resjudicata]

@promiseb Is the company able to issue shares while in bankruptcy proceedings? Would it be legal for them to just jack up the OS and start dumping into the bid all day in a circumstance like this?

 

[promiseb]

@resjudicata I don't know. itatter is right though that the stock has been halted. Whether or not it's legal, I think the SEC or FINRA would step in and prevent it from going very far.

 

[vojvoda92]

@promiseb Then why are you replying?

 

[kjcolt]

@vojvoda92 I know why I'm replying... I dunno if this subreddit allows it, but regular reddiquette is to not be a douche. I'm being a bit of a douche right now... So why am I replying?

 

[happytales]

@promiseb

probably be delisted.

Public knowledge eh? =p

 

[promiseb]

@happytales That's generally what happens to bankrupt companies...

 

[maryanne76]

@yuli I made $300 today playing this, so at least one.

 

[charlie3rivers]

@promiseb Look out for naked shorts.

 

[bluemoose]

@yuli For anyone playing one of those stock market games for your high school or college class, go all in and short this thing right now if you want to win.

 

[colton112]

@bluemoose Just tried, it doesn't let you buy any stock that's less than $1.00.

 

[littleclaypot]

@colton112 Good.

 

[ellorienne]

@colton112 So if everyone who is trying and failed because there is a limit, then I wonder which broker is allowing the purchase of this penny stock causing it to climb like it has?

 

[clairjen56]

@ellorienne They are talking about a virtual game, of course you can buy it IRL.