If the worst happens then they cannot service their debt and go under then there is far more equity than what the share is trading with. Good old Ben Graham used to buy stocks that he knew would go under and just wait for the administrators to pay them out. At the current equity level that mean about $4 a share. Sure there would be costs and but safely $2 per share probably closer to $3. It's just business sense. I mean no wonder the banks will lend to them. Its win win for them.
It will be very hard to lose all your bag here even if it goes bust at these levels. It will of course take about 2 years to wind up. I'm a trader but I only like to trade stocks that have long term upside it means I win one way or the other. Sure its being shorted and shorters will jump on any sign of weakness.
Sleep well on this one. Buy the weakness anything under a$1 is a bargain.
SGH Price at posting:
46.0¢ Sentiment: Buy Disclosure: Held
