Can I buy stock in a company that has filed chapter 11?
I was wondering if I could buy stock in a company that has recently filed chapter 11 (circuit city)? I don’t know if once you file chapter 11 is the market closed or what? Thanks
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Just answered this in detail here.
http://answers.yahoo.com/question/index?qid=20081110081058AAP5iUu&r=w#BaN_M2D0AnhGUqjJm65y
Sure you can buy the stock. Just keep in mind that the true value of the equity is zero. So anything above zero is an overpriced stock.
There will be people who will trade this for prob a year (penny stock buyers). The key is to find a greater fool to sell to at a high price.
See Greater Fool Theory
http://en.wikipedia.org/wiki/Greater_fool_theory
Also keep in mind that the symbol will prob change tomorrow and moved to the pink sheets. I would avoid buying it.
You can. Sometimes they go to the pinksheets and trade for a while. But its a really bad idea. The stock is usually dissolved and worthless and new stock issued when they reorganize. And you have buy the new stock all over again if you want it.
I would stay away from that company. They are struggling!
They’re closing 155 stores, creditors are turning a cold shoulder on them and vendors are wanting up-front money before delivery of goods.
I seriously doubt that you’ll see CC around after the holidays.
I know it looks tempting at its current trading price of about 11 cents/share, but you would probably lose any money you would dump into their company.