California Resources Corporation: Bond Traders Are Selling The Dead Cat Bounce And So Should Shareholders

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About: California Resources Corporation (CRC)
by: Edward Vranic, CFA
This article is exclusive for subscribers.
Edward Vranic, CFA
Long/short equity, Growth, momentum, event-driven
Summary

CRC has doubled off its low since releasing Q3 results.

Trading in the stock since the Q3 results appears to be a dead cat bounce as bond trading has not been nearly as robust.

Bonds are trading at junk status, including a series coming due in two months.

Bond trades do not believe they will be made whole, leading me to believe that there is a substantial risk of a restructuring event occurring in the near term.

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"Smart" and big money tends to move the bond market while retail and "dumb" money have a