As the saying goes, worse has come to worst for Aggressive Holding Poseidon Concepts Corp (TSX: PSN, OTC: POOSF).

This week the fluid management company announced a series of radical moves, suspending dividends indefinitely and forming a “special committee” to assess its future.

The move confirms that the remarkable earnings disappointment last month really did signal worse ahead. Future moves may include a CAD45 million writedown of receivables–another way of saying that customers won’t be able to pay for services rendered. And there’s a management shakeup as well, with the CEO getting the boot.

As I wrote in the December issue, swapping former Aggressive Holding PHX Energy Services Corp (TSX: PHX, OTC: PHXHF) for Poseidon ranks as my chief bonehead move for 2012.

At this point, however, the best move is just to take the loss and move on. The only real question is when to take it.

My view is capital gains taxes are likely to be higher in 2013 than they are this year. Consequently, I advise you wait until Jan. 2 to sell Poseidon, when the loss can be taken against gains from what should be a better year.

Some readers have pointed out to me that Poseidon management owns about 7 percent of the stock at this point, which gives them a vested stake in turning the ship around.

Other positives include no debt maturities this year, and the dividend elimination could provide as much as CAD87.6 million in cash over the next 12 months, more than enough to retire CAD55.54 outstanding on a CAD100 million credit line expiring June 30, 2014, as well as financial capital spending.

And the technology is certainly needed for the rapidly growing hydraulic fracturing business.

On the other hand, this company’s accounting has hardly been a reason to have confidence in management, and drilling will suffer in North America this year if the US economy does slow dramatically. With no dividend, the only hope is for some improvement of operating results to restore confidence in the stock.

But that’s not worth sticking around for at a time when poor market conditions are pushing other companies into the bargain bin.

Accordingly, I advise selling Poseidon Concepts on Jan. 2, when the tax loss can be applied against gains we’re likely to see in 2013–after sudden austerity in the US has run its course.

On a final note, some readers may be tempted to extrapolate our Poseidon adventure turned disaster to other lagging Portfolio stocks. Don’t. These companies will sink or swim based on how they handle their own challenges, and none are affected by Poseidon’s troubles.

Look for more on each of them in the January Canadian Edge, which will be published on Jan. 4, 2013.