What happens to the stocks after a company gets out of bankruptcy?

July 26th, 2010 | by admin |
stocks
Mr. Unknown asked:


What happens when a company like Six Flags(SIXFQ.OB) and you own stock of that company get out of bankruptcy, what does that mean for the stockholder?

I know that’s a great news, but does this affect the stocks? Like they will dump it and it becomes useless?

Alexander

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    1. No Responses to “What happens to the stocks after a company gets out of bankruptcy?”

    2. By Len on Jul 29, 2010 | Reply

      As a rule, shares distributed prior to the bankruptcy are wiped out and become worthless. Often they continue to trade but are nothing more than a blatant attempt to manipulate the unsuspecting.

      Len

    3. By MarcThyme on Aug 1, 2010 | Reply

      Bankruptcy “reorganizes” a company, so that the Six Flags that went bankrupt is a different legal entity to the one that exists after they “come out of bankruptcy”; unfortunately, shares in the former company are generally rendered worthless when that happens….(except to scripopholists, who collect certificates in defunct companies);

      Sorry!

    4. By Max M on Aug 2, 2010 | Reply

      The stocks are worthless….but you may get some leftover money if there is anything left after it’s paid off to executives and lawyers.

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