Common stock usually becomes diluted during bankruptcy, at best, but you maybe able to exchange your old shares for new shares in the reorganized company. These new shares, however, likely will be fewer in number and lower in value. If a company is determined by the court to be insolvent, stockholders may not get anything after bankruptcy. In any event, investors' rights will be explained in the reorganization plan.
A company emerging from bankruptcy may have two different versions of common stock: The old stock that was trading when the company went bankrupt, and the new stock issued during the reorganization. The old stock, usually traded on the OTCBB or Pink Sheets, has a ticker symbol ending in "Q." The new stock, if it was not issued (but rather authorized) by the company, will end in the letter "V," indicating that the stock will trade "when issued." The "V" will be removed once the company issues the stock itself. Understanding the difference between old and new stock is crucial to making smart investment decisions.
