Quote:
Originally posted by Tim Hancock
I read that same warning earlier. Is there a way to find out or make a reasonable guess when the stock could become worthless? I guess this part is unclear to me: "The opportunity for any recovery by holders of our common stock under such reorganization plan is UNCERTAIN and shares of our common stock MAY be canceled without any compensation pursuant to such plan." The terms "uncertain" and "may", are not very informative. I rarely think about dabbling in the market (as I have admitted that I am not well versed in it), but if I have a 50/50 chance of making a killing on this one, I might roll the dice (only talking about a couple thousand, so if it goes south, it would not be the end of the world).
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Those statements are written by attorneys, they are written with the intent of not saying anything with certainty. If they "lead" toward a conclusion, the company and its officers open themselves up to lawsuits.
I'd have to look over the company and its situation very carefully to draw a conclusion, but
most of the time, Chapter 11 reorganization results in existing shares ending up being cancelled. The creditors lending the company money while the company is in bankruptcy are first in line, they are followed by the other creditors, you will be way down the list of importance during the reoganization.
There are turn-around stories about companies coming out of bankruptcy and people making good money on them. Most of the time those making money on companies in bankruptcy are
not "gambling" though -- they are doing a
lot of work understanding the financial picture of the company.
I guess that's the biggest problem I have with what I'm hearing from you, it sounds like you are willing to take a "gamble" instead of making a speculative
investment.