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Why would a company going through a bankruptcy

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trader59 Member Level  Tuesday, 03/03/20 08:05:50 AM
Re: SC777 post# 374
Post # of 390 
Why would a company going through a bankruptcy be “pegged” at a market cap that is 200X’s current?

Looks to me like shareholders currently own 100% of the equity in the company, and after the plan is approved will own less than 6, like a RS with immediate dilution. There’s a possibility of an increase in value later if the company figures out how to make a profit some day, but some of those creditors owning the 94% of the equity will want to convert shares to cash as that happens.

I swear I’ll never use the phrase “you can’t make this stuff up” ever again after being on the OTC. Apparently you can.
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