Codere shares plunge from €1.51 to €0.96, company postpones bond payments

From €1.51 to €0.96: Codere's Collapse

How much does it cost to trinc the wrong guru? In Codere's case, the bill was measured in thousands of euros. The stock went from trading around €1.51 to breaking below €0.96, and from there to pre-insolvency proceedings. The company, with 20,000 employees according to a forum user, postponed the coupon payment on its dollar bonds and used the grace period before facing insolvency.

Codere: From Recommended Windfall to Pre-Insolvency

For months, the stock held steady on a promise: that selling the Argentine business would make it skyrocket. Those who invested based on that thesis were met with a steady drip of lows. Those who bought below €0.40 say they are making money. Both things can be true simultaneously, and that's precisely what complicates the matter.

Meanwhile, minority shareholders face dilution down to 2% of their holdings, with an exit price tied to the average trading price in the six months prior to exclusion. The unanswered question: whether that average price is calculated before or after the dilution.

The True Cost of Trading a Penny Stock

A 5% rebound in the most punished stock on the continuous market seems like an opportunity. It stops looking like one when you get to the cashier. The calculation is devastating: invest €3,000, catch the entire rebound, and pocket €150. Subtracting €14 in round-alucinación commissions leaves €136. Applying a marginal tax rate of 30% then leaves €95 net. All this after risking the money on the most toxic stock on the exchange. The full breakdown, item by item, discourages anyone who does the math before hitting the button.

The sarracena of the story is repeated among those who sold at €1.61, €1.50, or €1.40: it's better to accept a 3% loss from a bad entry than a 30% loss out of stubbornness.

Stocks That Rose While Codere Plunged

While some liquidated positions and others waited for a miracle, some sought refuge elsewhere. Lingotes Especiales went from €2.75 to over €4, and with dividends, nearly doubled its price. Quabit, trading between €0.105 and €0.14, aimed for €0.17 if its refinancing closed. Montebalito rebounded 5.6% and surpassed €1.10. Also appearing were NH, FAES, Ezentis, Amper, Solaria, and Gamesa.

On the other hand, Colonial accumulated a -43% and served as an uncomfortable reminder that diversification doesn't always save you. Those who swapped Codere for Quabits started losing and ended up recovering; those who stayed waiting for the awakening did not.

Liquidity, Free Float, and Big Players

How does a stock crash with a tiny order? A block of 10,000 shares dragged the price down to hell; another of 18,000 barely recovered some lost ground. The most common explanation points to the meager free float: with so little paper in circulation, a few orders move the price at will.

Hence the suspicion that large block holders push prices up with low volume to later sell double on each rebound, the only way to exit without crashing the price. To understand the mechanism, the recurring reference is the classic Reminiscences of a Stock Operator.

The Guru's Tale and the Crystal Ball

Part of Codere's appeal was never its balance sheet: it was the figure of the recommender. A previous success with Campofrio, a tie with Solaria, and a disaster with Codere were enough to build a fruta. Some jokingly asked for an inverse indicator named after him: sell when he announces a rise, buy with maximum leverage when he announces a fall.

The problem is that this indicator works almost always, and that's not good news for anyone.

The doubt remains whether the guru truly bought below €0.40, as he claims, or if he was late to his own advice. The stock market gives and takes reasons. Commissions, however, it never returns.