<<Shares do not disappear>>
Indeed they can -- and do -- in the only way that matters, monetary worth.
Generally, the creditors will control the terms of reorganization in a Chapter 11 proceeding. Equity (stock) owners are the last to get paid after government taxes, employees, secured lenders, bond holders, unsecured lenders, lien claimants, and of course the Trustee and bankruptcy lawyers. By the time the foregoing have gobbled up everything in sight, shareholders likely will find their stock is worth zero or at the very best a few pennies.
Oh, sure, they may be thrown a meatless bone of some sort -- warrants to purchase "new company" shares in the reorganized company once it emerges from bankruptcy, for example. More often, they get nothing but the loss which they can use to offset gains in some other stock -- and a bitter lesson in corporate finance.
Many a wall has been papered with stock that lost all its value, although the company survived and even prospered in reorganized form. Check out the old CAWS thread, if it is still archived somewhere. California Wireless went into bankruptcy about two or three years ago and reemerged some time later. Old shareholders wound up with nothing of value. "New" company stock was sold to re-capitalize the company. Within the last year, "new" CAWS was acquired by another company at a premium. Holders of the "new" shares made out well; holders of the "old" stock merely owned expensive scratch paper.
I wouldn't buy FEET right now at all. No. No way. Believe me, too many people much closer to the situation than I am are saying the company is done for. I assume from your message you bought more, however, so I wish you good luck. Hope it works out for you. |
