Detroit Business Daily

What happens to GM stock purchased AFTER the bankruptcy filing?

My idiot neighbor apparently invested a large chunk of change on GM stock on Tuesday - the day AFTER the bankruptcy filing. What will happen to that stock? Does it become, in essence, a "penny" stock, a turn-around quick-trade not-really-connected-to the-company-at-all thing? Or is he secretly brilliant and will shortly double his cash? Does anyone know?

Public Comments

1. No.
2. It doesn't matter whether he bought it before or after the bankruptcy filing -- he will loose all of his money if he doesn't sell before the new GM emerges from bankruptcy. The old GM stock is currently trading over the counter -- "penny stocks." He clearly doesn't understand Wall Street. As I have been saying here over and over again (along with others)...there are no secrets here. WS has run the numbers and everyone agrees: the stockholders will get nothing when the new company emerges from reorganization -- 90-180 days from now, in theory. In the meantime his penny stock will bounce around heading toward $0.00, trading among fools who think they are gambling on a long shot when it is, in fact, a done deal. The faster the fools figure this out -- the faster it will fall closer to zero.
3. the stock will not be worth anything, not even $0 it will be nonexistent
4. it does not loon prety good, but they say it may get better http://www.invest-investment.info/
5. It's amazing how stupid people get when they allow their dreams to overcome logic and common sense. To invest in something they have no real clue about is simply an act of desperation. It makes no difference when they bought GM stock. The odds are in favor of him losing 100% of his investment. Even in the unlikely event it doubles...... he's still not brillant. No half way good investor puts more than .005% of their portfolio into one idea with little chance of beating any odds. It's called gambling. If he "wins" big on this... he'll lose it (and more) on something else more ignorant.
6. The position he owns in GM will move in his portfolio and be found next to his Lehman Brothers stock (LEH) and Bear Stearns stock (BSC). For those of you who look them up, notice they're non-existant on the NYSE anymore. Long story short he will have zip. Zero. Nada. Zilch. Lot's of little pieces of paper that once reflected the American Dream and now represent the fruits of outsourcing, importing, and globalization. Well done USA.
7. go by your own head here, I bought 10K worth of stock tuesday for .56 and sold it today for 72c and made a nice little 3k+:) try and and save that working some grunt ball job for $8 an hour!
8. The GM stock was de-listed, and will be traded over the counter, until which point it is wiped out. Fox news reported: "The plan is for the federal government to take a 60 percent ownership stake in the new GM. The Canadian government would take a 12.5 percent stake, with the United Auto Workers getting a 17.5 percent stake and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out." Your neighbor will most likely walk away with nothing.