Monday, June 20, 2011

Seahawk in Bankruptcy.

This is the most interesting write ups that I have read in regard to a bankrupt company... I almost went long Seahawk, but, didn't as I was (fortunately and luckily) tied up in other stocks that I understood better.

In retrospect, this company turned out to be one of the most devastating value traps that I can think of. The management seemed to be shareholder friendly, it had the attention of many value investors, it was the victim of distressed selling, a bear market, a sector killing oil spill, AND it was selling below liquidation value... yet, it still went bust in a way that screwed a lot of really smart shareholders after everything of value was sold off to a competitor.

It's a very unfortunate situation, and one that makes you remember the importance of slightly diversifying your portfolio...

Disclosure: None. This is not advice of any kind. Always do a ton of your own research in regards to anything that I say, do, write, or so much as even think about.

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