RCC Holdings Corp fka RCCH

[frogdreaming]

Once shares are issued they take on a 'life' of their own from the company that issued them.

Does anyone know whether or not if you are short on a stock and the company goes out of business if you would have to buy the stock back?

Think about how many companies start trading by buying an empty shell. A shell, by definition, is the share structure of an 'out of business' company.

The company no longer exists, but the shares do and they transfer to the new company.

The reason that we KNOW that the concept of a company 'shorted' into oblivion, is an enduring myth, is the eternal existence of the share structure.

Think of the incredible value of a 'shell' that had a huge short position. If any of them existed, companies like Buffet's would be buying them up as fast as they could. They would buy the shell merge it with one of their existing businesses and reap the immense profits from the inevitable short squeeze.

The shells never die even when the companies do. There are no companies that have been shorted to death. WHile it may be counter-intuitive, they would be the most valuable companies in existence.