I bought the shares while Delta was bankrupt, should I sell before they pull out or will they issue new shares?
2007-02-06 07:41:59 · 6 answers · asked by Anonymous in Business & Finance ➔ Investing
I think I heard that they will issue new stock so that stock will no longer be any good if I understand that correctly. You probably made some money on it. Say you bought it for $.30 now I think it's a little over a dollar.
2007-02-06 07:51:30 · answer #1 · answered by Luvatlanta 6 · 0⤊ 0⤋
Actually there is some truth to what Carlos ,said. K-Mart declared thier shares worthless and issued new shares to the creditors to pay off thier debts. But when K-mart announced they were coming out of bankruptcy, people flocked in buying the old worthless K-mart shares, NOT the new shares trading under a new symbol, and it ran up pretty good for a few days. Sometimes that herd mentality gets going and people don't do thier homework.
2007-02-07 19:24:43 · answer #2 · answered by speedgeek 2 · 0⤊ 0⤋
the easy answer is no. Under a reorganization plan, sometimes the equity holders do get a piece of the new shares that are issued after the re-org is approved. Your shares probably have almost no value anyway, so I am assuming you want to do it to take the tax loss.
I would wait, if the re-org plan comes out and your shares are worthless, you can take the loss anyway.
the hard answer would require really digging in and finding out what is going to happen with the reorganization plan and then figuring out if your shares are worth more now or after the plan gets announced and also calculating the time value of deferring the losses...once that evaluation is done, you will have your answer...stick with the easy answer.
2007-02-06 16:37:33 · answer #3 · answered by Monument 2 · 1⤊ 0⤋
Don't believe Carlos. If new shares are issued (as happens most of the time), old shares are declared worthless. You get zilch. So sell now. Bond holders are first in line to get any money left, perferred stockholders next, common stock holders are LAST.
2007-02-06 19:49:16 · answer #4 · answered by gosh137 6 · 1⤊ 0⤋
If delta really comes out of bankruptcy, shares will increase in value, whether they issue new shares or not.
This strategy is called "fallen angel stocks", do some yahoo searches about it.
2007-02-06 19:03:35 · answer #5 · answered by Carlos G 3 · 0⤊ 1⤋
Maybe......
Then again, you're looking for investment advice from people you don't know. Whose credentials you don't know. Whose motives you don't know.
After you finish with the Delta stock.... I've got a bridge to sell you!
2007-02-06 15:56:44 · answer #6 · answered by Common Sense 7 · 0⤊ 1⤋