What happens to shareholders when a company goes bankrupt?
yodah20 asked:
Say I own 100 shares in E Trade and it goes bankrupt, would I lose all my invested money right then and there?
Other Posts You May Like:
- What happens to my stock if a company goes bankrupt?
- Federal Mogul went bankrupt and issued warrants for their shares. Can I write this off on my taxes?
- Bankrupt?
- What would happen if the US govt went bankrupt? How would that affect the typical American?
- What happens to a person’s mortgage when the lending company goes bankrupt?
You don’t lose it right away. You will still own your shares until they are cancelled which will happen when they emerge from bankruptcy under a reorganization plan. In some rare cases, you get to keep it if their was enough money to pay off all the bondholders after selling assets etc. USG went through bankruptcy not long ago and the common shareholders came out fine.
They start whistling for their money.
Yes, I would say so.
Whatever value left there goes to
major shareholders.
Nothing left for distribution to small shareholders.
oh yeah, you are pretty much screwed once they bankrupt. stock value will be 0
If it is common stock you might get $.05 on the dollar. If you are lucky. I had a company go bankrupt and I got lucky and got some money like 4 years late. I was enough to fill my gas tank and go to dinner. But usually you are SOL.
Stock holders are the last people to be paid in a bankruptcy. generally, you lose all your money.
You have a tax write off against your gains and limited carry over each year until the write off is gone.
Based on ETFC’s financials if they went BK, that’s it for stock holders. Hopefully they don’t go BK, but in this market anything is possible.