do u know if delta airlines will cancel its stock?

Answer 1

Most likely Delta will cancel its existing shares. That has been the case with the stocks of other airlines that have reorganized under Chapter 11, and it is the most typical pattern for publically traded companies coming out of bankruptcy.

I am not sure what stockpicker2010 is talking about. According to the Kaiser Aluminum reorganization plan approved in May, the equity, "the equity interests of current stockholders [were]cancelled and the equity in the emerging company would be distributed to creditors or creditor representatives."

It is entirely possible that some equity in the reorganized company was allocated to prior shareholders. This happens on occasion. For example, when Mirant came out of bankruptcy earlier this year, existing shareholders received approximately 3% of the equity in the reorganized company.

But it is not the pattern for the airlines that have been through the process in recent years.

Answer 2

No, stock shares are not "cancelled." When the company comes outof bankruptcy, it will change its ticker symbol. It is similar to what happened with Kaiser Aluminum. It was the stock KLUCQ trading at about five cents. They came out of bankruptcy yesterday and have a new symbol: KALU, trading at $48.50. No, it doesn't mean that my five cent share of stock shot up to 50 bucks overnight. There will be a split in the stock shares. For every so many you own of Delta in bankruptcy, they will give you so many shares of Delta in the new company. Don't be shocked if the ratio is like 500:1. So if you owned 500 shares before, you now own one.
Best of luck to you!


P.S. To TJ below...
Shares that are sold of a company while it is in Chapter 11 restructuring are generally designated with a "Q" at the end of their ticker- at least US NASDAQ stocks are. Bankruptcy is not an instant thing. You make it sound as though there was pre-bankruptcy and post-bankruptcy and that's it. There is also a "during" bankruptcy, too. When the company agrees to continue to sell its stock on the open markets, it does so with the condition that those shares will be met by real remaining assets as stated in the bankruptcy petition.
Now, if you invested pre-bankruptcy in the company- I don't know what it was in this case- say, KALM, then you, as an investor in the previous company KALM, have no claim at all the the assets for the company after bankruptcy is declared. Actually you do, but you are dead last on the list after creditors and lenders and the chances of you seeing any of that money, a la Enron, is very very unlikely.
However, if the company continues to sell stock under a bankruptcy ticker, in this case, KLUCQ (notice five letters with Q being the last...), then it is in fact a completely different company and investors in the company stock are taking the risk that the company may or may not come out of bankruptcy. If they do, then you got some shares on the cheap. If they don't, guess what? You are standing in line with all the people who lost money before, only this time you are behind them!
Now that Kaiser Aluminum is out of bankruptcy, it is trading under the ticker KALU, which is, in turn, another completely different company, basically formed from the remains of KLUCQ. When KALU began trading, it traded at $35/share, quite a jump from the nickel at which I bought it. But the shares in the bankrupt company are highly diluted. In fact, on the last day of full trading, KLUCQ traded over 119 Million shares. That's a lot. So in order to cut down on the float that these companies have coming out of bankruptcy, the court agrees to have them make a certain number of shares of KLUCQ worth so many shares of KALU. In this case, I think about 700 KLUCQ for every 1 of KALU. We don't know yet, we are still waiting to see the decision.
Whatever the case may be, if Delta Airlines comes out of bankruptcy okay, then it may be possible for them to swap shares to the "new company" one for one. Maybe it will 550:1. Who knows? We will have to wait and see.
Either way, the shares do not simply "disappear."

Answer 3

In bankruptcy, most of the time, common shareholders lose all of their equity money. Whatever assets are available go to the debt holders and if the company is reorganized it is in the form of securities in the reorganized company. One ominous sign is for the stock of a previously valuable company is to sink below $5. Some will make it back, but most will die. Right now the huge Ford Motor Company is slipping ever down to this dangerous price level.

Answer 4

It's not up to Delta. At this point, it is in the hands of the bankruptcy court. There is a Web site that you can check out for the latest news in Delta restructuring process:

http://www.deltadocket.com/