Does this mean if I own $1000 of a certain company stocks and it decides to cancel the existing stock, I lose my $1000 worth of stoks? Please help. If I don't lose it, what is the company going to do?
2007-03-10 10:39:45 · 5 answers · asked by Mr. USA 1 in Business & Finance ➔ Investing
A company cannot just "cancel" its stock. It must buy back all shares at a certain price, which would have to be voted on by shareholders.
2007-03-10 10:57:27 · answer #1 · answered by Brian G 6 · 0⤊ 0⤋
In a case of a company liquidation, the company is obligated to pay off it's bond holders first and use any remaining funds to pay the shareholders. So yes, there is a chance that you will lose all of your $1000 if there is no money available after paying the bond holders. Your stock will in essense be worthless.
2007-03-10 21:25:26 · answer #2 · answered by Michael C 1 · 0⤊ 0⤋
Companies that are going through bankruptcy pay off bond holders first. Common shareholders are last and many times there is not enough money to pay them back so the company does cancel its present stock. When it comes out of bankruptcy, it reorganizes as a "new" company (many times with the same name) and new stock is issued. You get nothing.
2007-03-10 19:23:28 · answer #3 · answered by gosh137 6 · 1⤊ 0⤋
The company has to buy the stock back off you, I'm not sure on the company laws in your area but where i am they have to pay at least the market value of the shares and usually they pay a lot more than the market.
2007-03-10 18:48:49 · answer #4 · answered by Anonymous · 0⤊ 0⤋
it means in lay terms "they f***ed ya over and someone took the money and ran
2007-03-10 19:00:37 · answer #5 · answered by swascndy21 2 · 1⤊ 1⤋