Investors Face Big Risks When Buying Bankrupt Companies' Stocks

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NNN0LHI (11742 posts) Dec-17-02, 03:54 PM (ET) Investors Face Big Risks When Buying Bankrupt Companies' Stocks http://ap.tbo.com/ap/breaking/MGA7O4IAU9D.html NEW YORK (AP) - A cheap ticket? Don't count on it getting you too far. Shares of United Airlines' parent UAL Corp. have been surging lately, although the troubled carrier recently filed for bankruptcy protection. And it's not the only bankrupt company whose stock has shown some strength. The list includes WorldCom, Enron and Kmart, too. There's a reason, though, that these stocks are so cheap. Buying them is nothing more than playing a game of chance. more   Alert Edit | Reply | Top

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Subject     Author     Message Date     ID    The technical term is "bottom feeding" gratuitous Dec-17-02 1    can we all say it in a single voice... salin 12/17/2002 5  if nothing else .... hadrons Dec-17-02 2  Greed. elastic Dec-17-02 4

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gratuitous (3727 posts) Dec-17-02, 04:01 PM (ET) 1. The technical term is "bottom feeding" The writer details most of what this type of investing is about: Folks looking for a quick score, because a stock that goes up a quarter point when it's trading at $75 a share is no big thing, but a stock that's trading at $1.50 a share has realized a substantial increase. The investors in these stocks are usually institutional with discretionary funds to waste. If they make a big score, great. If they lose all 1,000 shares, it's not like they plunged a whole lot of capital into it. Unfortunately, if the social security privatization plans the Republicans have go through, there's going to be a whole lot of money chasing investments, and more and more of the money invested will go to similarly dicey purchases. And when the investment company takes a bath on a stock, it won't be assigning those trades to its heavy hitters -- they'll be assigned to YOU.   Remove | Alert Edit | Reply | Top

salin (12805 posts) Dec-17-02, 05:43 PM (ET) Reply to post #1 5. can we all say it in a single voice... Ponzi Scheme (of a sort) "We expect there to be transparency. People who have something to hide make us nervous...." GWB in Alaska - discussing Iraq. A Proud Wellstone Democrat UNAPOLOGETIC, PROUD, POSITIVE, HOPEFUL,OPTIMISTIC LIBERAL AND PROGRESSIVE   Remove | Alert Edit | Reply | Top

hadrons (939 posts) Dec-17-02, 04:02 PM (ET) 2. if nothing else .... you could wallpaper your living room cheapy   Remove | Alert Edit | Reply | Top

elastic (827 posts) Dec-17-02, 05:40 PM (ET) 4. Greed. Never wins. It is a sin and you could know better.   Remove | Alert Edit | Reply | Top

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