What Happens when a Stock goes Bankrupt
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- เผยแพร่เมื่อ 21 ส.ค. 2024
- Now just to clarify the title of this video, a stock doesn’t a bankrupt it goes to 0 the company can go bankrupt, a stock is just a share, a piece of business. And if the business is worthless then so will your stock be in the future.
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1. Chapter 11 ( a chance to reorganize it debt and make a payment plan )
- Now this a company asking the courts to protect them from creditors until I can make a plan of repayment ( so their assets don’t get seized)
- Now you often people do this In order to get some time to recover and make payments at a more manageable pace
For example:
- Invested into a company that might have been forced into Chapter 11 bankruptcy
- That company was an airline during the pandemic and I knew for sure that the airline had gone through chapter 11 before and had come out perfectly fine
- So I went ahead and invested even with that threat and I made 100% on my money
Keep in Mind:
- When the public hear bankruptcy its gets scared but if its chapter 11 it might not be bad ( or it may ) it's your job to find out
- So your shares will likely be okay but will take a big hit
- And if the company does not recover then they can all the way to 0 and force the company to liquidate
Tip: Keep in mind more than often the company will stop paying out dividends
2. Who Gets Paid when the company Liquidates
- ( once the company get liquidated, Bonds holder first, Preferred shareholder second, and the common shareholder last )
- Which means often when they go bankrupt common shareholder get nothing
- So keep that in mind
However: Liquidation are not bad ( bankruptcy is the problem )
- During the 1920s company we’re selling for less than they we’re worth
- So common strategy was to buy as much common stock as possible
- And then force the company to liquidate and pay you a big paycheck to the shareholder( Benjamin Graham was the King of this )
3. Chapter 7 bankruptcy is a Different Monster
- This means the company is 100% done and all the assets and procedures will be given to the creditor
- And if their going bankrupt they most likely don’t have enough to pay the creditor
- Which most likely mean nothing you the shareholder ( and your shares are done )
4. So here is some advice
- Make sure you understand the company you are going to invest into
- And buying the dip when a company is trash means nothing
- Protect your capital
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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I'm an Accountant but I'm not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.
Congrats Tommy on 350K subs!!! 🎉🎉🎉
congratulations on your achievement brother 🙌350k🎉🎉
Gracias brother
When a company hoes bankrupt, the shareholders gets nothing. However, the shareholder's loss is a capital loss according the the IRS. That loss can be applied on ones tax return. The can be used to offset any capital gains.
WHY DOES THIS ONLY HAVE 3.6K VIEWS??? THIS IS IMPORTANT!! 🔥🔥🔥
Lol this is something no investor don't wanna think about
Lol facts
Love it Tommy everything you say makes sense thank you brother 🙏🏼
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They trade OTC making it harder to trade. Also less volume and less interest. But they can also restructure and meet requirements for relisting sometimes.
In few months or no time people will definitely start kicking themselves in regret for missing the opportunity to buy or invest in cryptocurrency.
Hello From Spain! I've been an investor in the crypto market for over 25years
Now is the best time to purchase and invest in bitcoin with the current rise in Bitcoin.
It's obvious a lot of people remain poor due to lack of ignorance😊
it's not about ignorant but due to the lack of trust and unprofessional broker in the trade
Well no doubt but they're still good and trustworthy Professional broker out there waiting for an investor
There are circumstances when purchasing bonds of companies about to file or already file can be profitable, if you have the ability for it, where you essentially buy the secured debt for less than its worth with the goal that the company will emerge stronger after bankruptcy or cancel existing shares and issue new shares in exchange for the secured debt.
Keep dropping theses gems 💎
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Great job as always keep it up bro
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I am in that situation with Nikola. Any advice, suggestion please, thank you
Congrats 🎉 on 350k
What is your opinion about Bitcoin investment trading?•=+•=4=•4•=7•=4•=5•=1•=2•=3•=3•=4•=3•=9•=
Tommy I want to know what happens to shareholders when a company declare chapter 11 and is being delisted from the NASDAQ but continue trading on OTC? If the company resolve its problems do shareholders shares are not being wiped out? The case I am talking about is Core Scientific of which I hold a substantial number of shares.. Moreover I want to buy more Exela of which I hold 15k shares yet..... thank you in advance for your suggestions
Ben Stein and Phil DeMuth's "Yes! You Can Time The Market!" is a great book. I tell people that that it's really nothing more than a legalized gambling casino and don't put too much money into it simply because it is very risky. I'd put about $100 on a cheap stock that has a proven market that will never go away.
When if we need to increase position in bankerupt comapny they said (( reduce only )) !!!
If stock goes to $0, wall street can do their scam again of making money on options.
The thing is that we can too! We already own Gamestop (or would it Robinhood wasn't sucking Wallstreets toes and selling our stock without our permission) and we can own the whole world
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What do you think about We Work ?
It crashing? not much
Endp going bkp so how do we play it?
Lol you lose your money. Lol beware of penny stocks.
Just here to say get DOGE it's not only rebounding you're able to get 2% interest off gemini now. This is going to be big!!!!
Its a shitcoin now just like it was back in 2017.
Bet! It's a great coin!
@@ilovebrocoli6068 anything that wasn't bitcoin is a shit coin, but bitcoin is old and outdated.
Damn it 😂
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UwU..