[smwinc]

Wow, sucks to be B&B Chief Phil Green. His holding's in B&B were worth around $440 million at the peak in 2007. Currently it stands at around $67 million.

Ouch.

(Disclaimer, I am now long in stock/CFDs since the close Friday 13th).

Personally, I couldn't ignore this as a trade.

At 5.25, we should at least test the IPO price (from 4 years ago!) at 7.60, which would be around a 40% gain.

You're maximum risk is that the company goes bankrupt (5.25 at the close on Friday).

Unless someone is hiding something seriously big (never underestimate that possibility), but I think it's a little unlikely.

It's likely there was a severe overreaction as nearly everyone on a margin-loan who owned shares would have been squeezed out once we took out the IPO price from 4 years ago.

Worth having a look at. I'll post the updated charts over the next few weeks.

[smwinc]

Update:

Sold out 80% position on the gap fill, got filled @ 6.90.

Why 80%? Magic risk-free number. Assuming 100 shares:

100% * 5.25 = (525) - Initial Purchase
75% * 6.9 = +517 - Profit taking.
25% * 0 = +0 - Worst case scenario company goes bankrupt.
Net Result = -7.5

At 80%:
100% * 5.25 = (525)
80% * 6.9 = +552
20% * 0 = +0
Net Result = +27.

Now in the position where the last 20% can go to zero, and I still come out on top.

I don't do many stock trades, but when an opportunity knocks, worth taking I think . .

Cheers