You know I had a tempting thought today. Delta is trading at .70 cents. Yep you heard me... CENTS. Pre 9/11 Delta Stock was $50. To give you an idea of what that means. If you purchased $1000 dollars of stock at $.70 and it went to $50 your shares would be worth some $70,000. Seems like a real attractive risk. I mean you might turn 1k into more thousands but if it tanks you just loose a 1000 dollars. Not an insignificant amount for most folks. But based on a real possibility of doubling/trippling or more it isn't to bad an idea... that is except for one thing. That stock is worthless and even if the company recovers it will almost certainly remain so. How is that ? Becuase it seems to be standard that when a comapny emerges from bankruptcy it is not common practice to honor the old shares. IN fact in most cases when the company arises from the ashes of bankruptcy it seems the old stock is thrown out and new stock is issued. Often common shares are not replaced.. IE you lost your old shares and if you want new ones you have to buy them. Or you see a reverse split. IE if you had 10 stocks, after a reverse split, you would have 5.
And yet despite this fact the stock is still allowed to trade. I think that is wrong. Either the stock should HAVE to be honored upon comming out of bankruptcy or the stocks should dissolve at bankruptcy in order to be re-issued after emerging from bankruptcy. Else it is a highly misleading situation to have the stock available for trade.
If nothing else a companies intentions regarding its stock should be legally required to be determined as part of a bankruptcy filing. IE will new stock be issued and will current stock be transfered on a one to one basis or on any basis at all.
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