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Monday, March 25, 2024 3:44:09 PM
In most bankruptcy cases the common shareholders are impaired and the stock is canceled.
From a SEC warning about Q stocks.
"Regardless of the type of bankruptcy a company files under, any common stock in a bankrupt company is likely to be worthless. That is because the common stock (that is, “equity”) is the last in line to receive what’s available to be distributed in a bankruptcy proceeding."
"What are the risks of investing in a bankrupt company?
When a company files for reorganization under the federal bankruptcy laws, investors may be tempted to buy or hold the company’s common stock in anticipation that the company that emerges from bankruptcy will be profitable. The reality is that when companies emerge from bankruptcy, the “old” common stock of the company is usually worthless. In most instances, the company’s plan of reorganization will cancel the existing shares of common stock."
Proceed at your own peril.
IG
The First Casualty of Emotion is Reason.
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