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euroman71 asked in Business & FinanceInvesting · 1 decade ago

GM stock - what happens if company issues new stock?

Let's say GM goes into bankruptcy and their stock value is goes down to 10 cents, or completely wiped out. Then GM issues a new stock, what happens to GM shares that I own? Do I loose it all, or my shares become part of newly issued stock? Thanks

4 Answers

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  • 1 decade ago
    Favorite Answer

    As with everybody else that has experience here, current GM shares will be worthless when they file for BK. This same thing happened to Kmart years ago. Everybody and their mother rushed to buy the stock thinking it was cheap and got terrible advice from their broker. They were able to use their so called "stock certificates" as wallpaper at the end.

    Investors should really do their homework before purchasing any stock.Most novice investors do not have an exit strategy before getting involved and base their purchase on pure emotion. Sorry for the overkill but I feel that investors need to be a little more educated before committing any money in the market.

  • 1 decade ago

    If you own bonds that includes GM stocks, and the company goes bankrupt, you might and likely get money. That is happening with Chrysler . The bond holders are demanding their share -- forcing Chrysler to sell their assets to pay bondholders.

  • got it
    Lv 5
    1 decade ago

    IF GM files for bankruptcy, you will lose your current gm stock, it will be worth ZERO. If you have some, get rid of it now, bankruptcy is around the corner - please listen to me. Good luck

  • 1 decade ago

    the existing stock will be worthless. In very rare circumstances current shareholders may receive some new shares. But that is not likely.

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