Volmanac leverages data to monitor and discover potential investment opportunities which display an asymmetric risk profile, allowing us to deploy more capital in trades that we perceive to have less risk than the market believes. Knowing if a company is going to file for bankruptcy certainly fits into this category - which is why Volmanac actively monitors WHOIS registrations for keywords of distressed companies.
When a company files for bankruptcy, oftentimes they will create a website to provide docket information to creditors. When Newpage filed, they created a website called “newpagerestructuring.com” on August 2nd, 2011 (see image below):
However, Newpage filed on September 7th, 2011 - over a month later. Newpage 11.75s trading down fairly substantially on the filing, given that there was still speculation over a deal with Verso and a few large holders before the bankruptcy. Knowing that this website had been registered one month prior would have been very helpful in handicapping the risk that Newpage would ultimately file - and this registration information is in the public domain.
Volmanac was most likely the only investor in the world who discovered this WHOIS record.
Many other companies telegraph bankruptcy filings the same way. Exide filed (again) for bankruptcy protection on June 10th, 2013. However, the site exiderestructuringinfo.com was registered on May 16th, 2013. While it is fairly clear some names will file, I do not believe Exide was 100% telegraphed to the market and I believe bonds were down 5-10 points in the month prior to filing. See WHOIS record below:
This happens all the time, below is just a small sample of bankruptcies which were telegraphed by a WHOIS filing:
|Company||Website||WHOIS Date||Bankruptcy Filing Date||WHOIS Record|
|Edison Mission||http://www.edisonmissionrestructuring.com||12-14-2012 (Friday)||12-17-2012 (Monday)||Record|
|US Fidelis||http://www.usfbankruptcy.com||9-28-2010 (Weekend)||9-30-2010||Record|
|American West Development||http://www.awdevelopmentreorg.com||2-23-2012||3-1-2012||Record|
Volmanac actively monitors new website registrations for keywords to discover these websites. Please contact us if you are interested in receiving alerts when a new registration is found.
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