TSXV:POI.H - Post by User
Post by
Wallcrawleron Oct 30, 2016 4:00am
258 Views
Post# 25402961
Bridge loans
Bridge loans Stock After Bankruptcy
What typically happens as a company emerges from Chapter 11 is that it simply cancels its existing stock and issues entirely new shares. When this happens, the old shares become worthless. The new shares usually go to the creditors: The company doesn't have the cash to pay those creditors, so it gives them a share of ownership. You might be given the opportunity to exchange your old shares for new ones, but your stake in the company will be considerably smaller. Once the company issues the new shares, their price will be determined by the same market forces that determine all stock prices. If the market believes that the reorganization created a viable, stable, potentially profitable company, the price will go up or at least hold steady. If the market believes the Chapter 11 was just delaying the inevitable, and that the company will fail again, the stock price will reflect it.
Im just guessing here, but i think this is why BIG is making bridge loans. ive already taken my loss and just trying to inform those still holding, i do hope the best for shareholders. by my calculations they should be out of cash sometime in november. 840 grand from debtenture + 400 + 600 from BIG say 500 from operating revenue for the quarter, that gives them 2.4 mil. their last quarter burn rate was 2.4 mil. 4 quarter ends oct 31. i hope im wrong. best of luck to all still holding.