January 7, 2011 | In: Financial

AIB: All the Way to a Penny

Even in this fresh start of the year, where most financials are going up and breaking new highs on very high volume, AIB is determined to resist this upward trend, and continue its decline, all the way to a penny. The last time the stock saw a value above $1 was back in December 22nd, just over 2 weeks ago.

What’s going on?

Clearly the restrictions that the Irish government is imposing on Allied Irish Banks have reduced it to a penny stock in Wall Street. The Irish government dramatically reduced the size and the activity of the bank, and now it’s just a fraction of what it used to be a month ago.

Should investors flee this stock? Definitely! The stock might not even exist by the end of this year. So, either short this stock, or just get out! This stock has no future at all, as the original bank who issued the stock is not the same bank anymore. AIB is now a weak, government owned, limited, and untrusted bank.

Just for the records, AIB is 200 years old, it’s a shame to see it go. In a few years, some people can destroy what took others hundreds of years to build.

For fun, you may want to buy 10,000 shares of AIB when it reaches 1 cent. That will cost you a whopping $100.

3 Responses to AIB: All the Way to a Penny

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A Simple Introduction to Shorting Stocks « Fadi El-Eter

January 22nd, 2011 at 12:27 am

[...] think that AIB will be trading at a penny in the very near future, so you sell short 10,000 shares of AIB at $0.80 a share and you get [...]

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What Are the Worst Bank Stocks? « Fadi El-Eter

May 1st, 2011 at 2:30 pm

[...] the current month), and is one of the most volatile stocks ever. I still believe that the stock price is heading for a penny, even though it gained in the last month and there was reverse split (1:5) back in February. Unless [...]

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Citigroup Reverse Split Aftermath: It Wasn’t Great! « Fadi El-Eter

May 10th, 2011 at 4:02 am

[...] The stock dropped 2.3% on more than average volume. Quick note here: the volume on Citi is now misleading, it should be multiplied by 10 to be compared to the average volume, and since there was a volume of 49.29 million shares, then the real volume was 492.9 million shares compared to an average volume of 376 million shares. Note to Google: Please fix the volume to reflect the new reverse split. It would also be nice to fix the other stock data, as we no longer know which one is right and which one is wrong. Anyway, going back to C, it seems that investors didn’t really appreciate the reverse split (which is common mainly in penny stocks), despite that C was upgraded to overweight by Morgan Stanley. Generally, stocks tend to drop until they find a decent support in reverse splits, look at AIB, for example (of course, AIB is, sooner or later, going to a penny). [...]

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