Quote:
Originally Posted by tisonlyi
From what I've been reading, it looks like current shareholders will be wiped out, with bondholders becoming the new shareholders.
Et voila. Debt free GM emerges.
There was a reason your grandfather didn't play stocks so much... (go on, whose grandfather did?)
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Interesting. Does GM make the decision on whether the stocks are wiped out, or does the commission/party in charge of the bankruptcy determine this?
If the company itself does, it seems like a shoddy practice. The investors that do stay with the company until the end get burned, the company emerges debt free, and can later start over, making its shares available to new shareholders? Seems a bit odd if true, and certainly doesn't reward loyal investors at all. It also seems like a much larger risk from the perspective of a prospective investor looking to buy now in the hopes of dodging his stocks being voided and actually turning a profit.
I was thinking it might seem like an interesting gamble if it was as simple as bankruptcy/bust or profit off a $1.00 stock that is bound to increase at some point if the company sticks around, but it seems it's not nearly as cut and dry as that.