What happens to my stock if a company goes bankrupt?
Joe K asked:
I own stock in a company that is facing bankruptcy. Will I lose my stock if the company is acquired by another company or will I lose my stock if they go bankrupt and do a reorganization settlement/agreement with their creditors?
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Yes to both.
Out of interest, why do you ask so many questions and, yet, you never choose a best answer? That really *****.
- Pepper.
It’s called risk. If the company does well, the creditors get only their interest and your stock can double. If it does poorly, your stock get wiped out. This is why we diversify, a bunch of good ones make up for one that goes bust.
Actually, you should never lose everything because you should be watching your investments and getting rid of it when it starts to go down. The brokers on Wall Street preach buy and hope oops. I mean buy and hold because it makes less work for them.
if they go bankrupt, your stock is worthless. if they are acquired by another company, you will be given shares in the new company
well the stock will become a penny stock meaning that it will only be worth pennies, your stock is probably low enough because it is facing bankruptcy and other investors in that stock are selling it, so it is up to you if you want to sell it or not.
you can use it instead of toilet paper