What happens to common stocks when a company emergey from its bankruptcy?

Answer 1

Most often in bankruptcy the common stock is a total loss and ownership of the commpany goes to the bondholders and other creditors. When the company emerges from BK usually they issue new common stock which is now owned by the old bondholders.

Answer 2

If the company still gets something left after paying debt, lawyers fees, etc. Then the common stocks still have some values - representing a portion of ownership.

But in most cases, a bankrupted company would wipe out all the previous common stock owner's ownership, and will issue new stocks when emerge from bankruptcy - under new owners. Previous owners (stock holders) will get nothing.

Answer 3

Depends on the scope, assets, etc. sometimes they go right off the board and your money just vanished ! Sometimes they make a comeback, but usually restructure and share amounts change, etc. but basically, it is not usually good !