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FYI on bankrupt stocks--

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Howzie   Wednesday, 12/27/06 03:19:12 PM
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FYI on bankrupt stocks--

I've seen too many people think they'll make a killing on the Qs (nasd adds a q on stocks in bankruptcy). You can trade 'em and make money off of other people's ignorance but remember one thing : most times when the company exits bankruptcy, it's old equity gets cancelled. Worth nothing. NADA.

Think about it: they are bankrupt because of too much debt. Usually if a company survives restructuring, all of the debt holders get paid in order, and fully, before the equity holders get anything. Usually, there isn't enough to go around.

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