If someone buys stock in a company then they can watch that stock value go up and down as the markets take it (normally down lately). But my question is, what happens if someone has stock in something like GM?
Sure the value is low now but if GM files for bankruptcy protection what will happen to their stock? Yes, it will go down and bottom out but if they come out of bankruptcy protection and continue to operate are those stocks still good (or worth at least what the markets dictate at the time) or are the old stocks no good any more and someone has to buy new stocks?
I use GM just because they are in the news but of course it could be any company filing for protection and hopefully coming out of it able to carry on.
Thanks
Usually when a company files Chapter 11 there is no equity left. The stock is eventually canceled and worthless. The company issues more stock in a reorganization and start all over again. Shareholders have to buy the new stock again.
