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What happens to the stock when the company goes into bankrupt court?
Wiki User
∙ 14y ago
In virtually all cases the stock is made worthless. It may exxentially be taken and used as payment to those creditors that the company can't pay...basically saying that for the debt they had, they bought the company....maybe with their resources (read - money), they can refloat the company and eventually sell the stock to recover the loss. Understand that stock represents ownership...equity...it participates in the earnings of the company... but the amount of loss a company has is limited to a stockholder to the amount of his investment...the creditors can't come to the stockholders and demand payment for the debt (which they can in say a proprietorship or partnership...the "owners" are personaly liable for the business debts). Hence, any interest or rights you have in the Co are usually lost, or taken by the creditors, since they aren't getting paid what they were owed. Anything else would be unfair. In a C-7 the company dissolves and the stock disappears. If the sale of the assets of the company provide more money than is needed to pay all the debts, the excess is returned to stockholders...this rarely happens.
Wiki User
∙ 14y ago
Wiki User
∙ 14y agoThey go down. Dummy. Generally, almost always, common stock is worth nothing, in exchange for the Co it represents equity in not paying all it's obligations to crediors. You have negative value...you (the owmer of a company) owe more than you are worth.
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What happens to a publicly traded company when its stock goes to zero?
you can claim a CAPITAL GAIN LOSS ON YOUR TAX RETURN FOR THE YEAR IF THE COMPANY GOES BANKRUPT that's it.
Can the overselling of a stock cause a company to go bankrupt?
No, if anything it may prevent it.
If you buy gm now and they go bankrupt you lose your money?
That's generally what happens when you make a bad investment. Stock is equity...ownership....not debt or a loan to the Company.
What is the disadvantage of having a single stock?
if the company goes bankrupt or if the whole stock as a whole crashes then you would lose all your money or alot of it but if the single company is good in time you will get your money bank as long as the company didnt go bankrupt 1 stock company is very good if its a good company because its easy to manage it and learn about the ups and downs of it
What happens to put options when a company goes bankrupt?
What happens is the put writer gets hosed. If a company goes into Chapter 7 bankruptcy, all its stock becomes worthless. Unfortunately for the people who wrote put options on the company's stock, those do NOT become worthless. If the put buyer decides to exercise the option - and he will - the writer has to buy all those shares of worthless stock at the strike price.
Why would you want to buy a stock from the Virginia Company of London?
Hopefully to make a profit. Alas the company went bankrupt.
Can you claim a investment loss on stock for a company that went out of business even if you did not sell the stock?
Yes. If a company goes bankrupt and, especially, if its business is liquidated, you can claim the full loss on the stock in the year the event occurred.
If you have stock in a company that comes out of bankrupt what are your shares worth?
Almost always nothing and they were forfitted as part of the BK resolution
When a company during the Gilded Age era went bankrupt which group of people suffered financially?
The stock and bond holders
What is the different between a stock and a bond?
A stock represents a small 'ownership' unit, where a bond is a 'debt'. If the company makes profits or losses, stock holders take this first. If the company goes bankrupt, shareholders are wiped out and then debtholders wear the next pain.
What happens to previously issued stock when one company buys another company?
The parent company owns all the stock of the subsidiary.
Can you buy stock during a bankruptcy?
That would be an extremely risky move. In all probabilities, the stock of the bankrupt company would get de-listed from the exchange and you may not be able to sell them at all. The chances of the company taken over by someone else and then get the stock re-listed etc are difficult events which may take years. So if you feel a company is going bankrupt - the wisest move would be to exit your holdings.
