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Jun 28Doug Smith

Buzzword of the Week: Bagel Land

Jun 28Doug Smith

This one is definitely a buzzword I had not come across before. According to Investopedia, Bagel Land is a slang term that represents a stock or other security that is approaching $0 in price. Arriving in Bagel Land is usually the result of one or more major business problems that may not be resolvable. This term is typically used to describe an asset that has fallen from grace, as opposed to a penny stock or other historically cheap security.

Why Bagel Land? When the security’s value is approaching zero, it begins to resume the shape of a bagel (with a hole in the middle, it looks like a big, bready 0). While returning from Bagel Land is possible, the likelihood that equity investors will lose their entire stakes in the company becomes very high.

Investopedia did not speculate on whether there were multiple flavors to this phenomenon…

 

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