First I’d like to know something about Chapter 11 bankruptcy. How does it work? some people say it’s a debt reconstruction, it doesn’t actually mean the company goes bankrupt. But why it’s called "bankruptcy protection", how does it relates to bankruptcy?
Second, why the price of a company’s stock will go up after chapter 11 bankruptcy? Do you think right now is a good time to invest in GM and Six Flags inc? Thank you!!
The management of GM is begging investors not to buy GMGMQ stock anymore. Because this stock has no value. But many investors keep buying it anyway.
http://www.footnoted.org/blog-notes/gm-please-dont-buy-our-stock/
Buying worthless stocks usually leads to the loss of your whole investment. And for this reason you shouldn’t buy shares of any company that has filed for bankruptcy.
