RE:RE:How Ivanhoe Goes Bustwestlander168 wrote:
my plan: buy in at $0.06, sell at $0.09
You can do that - just be nimble, just be quick until they shut down the game. For instance, when Nortel Networks and Air Canada filed for bankruptcy protection under CCAA proceedings quite a few years ago, people were warned that there was no value in those "old" shares, but speculators still bought boatload of those shares. The two stocks traded heavily daily - up and down - and the shares eventually went to zero as the "old" shares were cancelled. The "old" shareholders have no pecuniary interest, post-bankruptcy, in the "new" Air Canada trading at Can$12.54/share on TSX, or Nortel trading at US$0.0037/share on OTCBB.
SEE: SEC WARNING:
| "Q" is for Caution
Investors are often confused by the fact that, despite the likelihood that the common stock of a bankrupt company will be cancelled, the company's securities may continue to trade after the company has filed for bankruptcy protection and before it emerges as a newly reorganized company. This confusion may be aggravated by the lengthy bankruptcy process—which may take months, if not years. Such securities typically trade on either the OTCBB or the Pink Sheets and the stock symbol will have a fifth letter "Q" at the end to denote the company’s bankrupt status. |
Risks of Trading in Securities of Bankrupt Companies
When a company files for reorganization under the federal bankruptcy laws, investors are often tempted to buy or hold the company’s common stock in anticipation that the company that emerges from bankruptcy will be profitable. The reality is, however, that when companies emerge from bankruptcy, the common stock of the “old” company is usually worthless. In most instances, the company's plan of reorganization will cancel the existing equity shares.