Horsehead Holding Corp (ZINC) Files For Chapter 11

Horsehead Holding Corp (ZINC) Files For Chapter 11

Horsehead Holding Corp. on Tuesday filed for Chapter 11 bankruptcy protection, as we reported earlier. Shares of the company were trading at as much as $20 a share only a few months ago in August 2015, today shares dropped 57% in NYSE trading to $0.11 a share. The stock was a holding of many value investors including Mohnish Pabrai who sold out recently after taking a big loss. Many have been critical of Pabrai’s investment in the company. One twitter user mocked Pabrai who is known to use checklist and use the phrase “heads I win, tails I do not lose much” with the following comment.

  • Capital intensive: check
  • Highly cyclical: check
  • Heavy financial leverage: check
  • No competitive advantage: check
  • Labor force unionized: check
  • Industry subject to heavy regulatory oversight: check
  • Company in midst of turnaround: check
  • Has the industry benefited from macro tailwinds in last few years (low oil prices, cheap auto loans, etc): check
    I cannot believe I found a company that passed all my checklist criteria. I am going to put 50% of my money in this and cannot see how I can lose money.
    Heads I win, Tail I