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Anyone know how pink stocks work (bankrupt)

Discussion in 'Members' Lounge' started by cheese9988, Mar 15, 2008.

  1. cheese9988

    cheese9988 Senior Member VIP

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    Lets say I bought 500 shares of some Delphi stock for 0.125 a peice. What happens when they emerge from being bankrupt? Do I actually get a gain when the price shoots up?
     
  2. reckedracing

    reckedracing TTIWWOP VIP

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    if you still hold the stock then you should be in for the gains
    i see no reason why you wouldn't be
     
  3. cheese9988

    cheese9988 Senior Member VIP

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    I don't see why either. But...right now is 0.125 so...

    If I bought $1000 of it I would have 8000 shares. If it went up to say $30 a share I would have $240,000 from that $1000 I put in. Just seems a little too easy.
     
  4. Luis998

    Luis998 Honda Enthusiast

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    That sounds kind of like penny stocks...which that seems to be. If they pull out of bankruptcy and were to go up to $30 a share...wooo...you would be in the money and then some my friend. Best of luck to you.
     
  5. reckedracing

    reckedracing TTIWWOP VIP

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  6. cheese9988

    cheese9988 Senior Member VIP

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    Still seems to easy. If that is correct I'll be a millionaire next year and retire at 28.
     
  7. reckedracing

    reckedracing TTIWWOP VIP

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    Why shares of bankrupt companies usually go bad - MarketWatch


    Stock from bankrupt company worthless :: CHICAGO SUN-TIMES :: Savage Q & A
     
  8. reckedracing

    reckedracing TTIWWOP VIP

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    Common targets of manipulation and fraud.
    And the opportunities for fraud come from both traders and companies. Since the share prices of these stocks are so low, often 30 cents or less, a single investor is able to buy or sell a large number of shares and have a big influence on the stock. Certainly, this can also happen with listed shares. But it's much easier for more investors to do this when share prices are low.

    USATODAY.com - Investor beware: Pink Sheets, Bulletin Board often too risky
     
  9. reckedracing

    reckedracing TTIWWOP VIP

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    their bankrupcy plan as of nov 07?
    DPHIQ Delphi Corp Question on Stock in this Co. - Investing Minds::Forum - View Topic
     
  10. cheese9988

    cheese9988 Senior Member VIP

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    That makes more sense.

    Someone keeps insisting I buy the stock. But if this were true, then everybody could do the same thing, I wouldn't think there would be enough money to distribute.

    From other reading it looks like they would probably just open another ticker symbol.
     
  11. reckedracing

    reckedracing TTIWWOP VIP

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    i don't know how many outstanding shares they had but this $204Mil probably equals .05 cents cash per stock

    the redistribution of stocks could be 200 old stocks for one new one

    i'd stick with the experts and avoid the stock
     
  12. awptickes

    awptickes unimpressed by you VIP

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    OT, but I keep reading the title of this thread as Anyone know how pink SOCKS work (bankrupt)
     
  13. get_nick

    get_nick These snozzberries taste like snozzberries... VIP

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    i think you mean pink "shares". they are stocks under $5 that aren't listed on the nasdaq.

    they are high risk, high reward. all too often they don't move or they go bankrupt. if you really want to gain more money with more advantage and less investment, look into stock options. you will buy or sell a "right" to the stock and make money off of that without actually owning the stock.
     
  14. vtecsir1

    vtecsir1 Senior Member

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    i would not suggest options unless you are an exp. trader/investor. first of all not the average joe can be approved for option trading unless you are talking about writing a covered call.
     
  15. totalburnout

    totalburnout Well-Known Member VIP

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    If you believe a company will go bankrupt, talk to a broker, and sell the stocks short.

    Instead of the buy low, sell high philosophy, selling stocks short is sell high, buy low philosophy. You sell someone else's, who has bought on margin, shares when the stock is priced high and then you're obligated to return the shares eventually. The point of this is that you buy back in when the stock is at its lowest. The best thing that could happen for a short seller is bankruptcy.

    You sell $10,000 worth of shares and the company goes bankrupt, those shares are worth $0 now. Congratulations, you just made a $10,000 profit.

    The difference between selling short, and long term holding and selling is; the risk of selling short is infinite (the stock price could climb to $xxxx dollars a share and you would be obligated to buy back in at that price, whenever the contract with your broker demands) and the reward is not infinite (the best you can do when you sell short is hope for bankruptcy), a buy and hold philosophy allows infinite reward with a non-infinite risk (you can only lose however much you pay for a stock).

    I would bet that theres quite a few short sellers with Delphi, already. The idea behind short selling is that when you analyze a company's financials or position and find a discrepancy that makes you believe the company is overvalued, you essentially take a position against the company - you believe the stock price will drop.
     
  16. get_nick

    get_nick These snozzberries taste like snozzberries... VIP

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    i was thinking of selling short on google when it was at $490. woulda made a bundle. but i didn't check into what the margin call requirements are. plus i HAVE to use smith barney since i work there. it's a pain in the ass to trade now.
     
  17. totalburnout

    totalburnout Well-Known Member VIP

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    Google will be back up there after we begin to see some growth again. Nothing material in the company has changed, but techs are usually the first to take the hit during the time proceeding or during an on going recession.

    I have faith google and Apple will both climb up high, again. ...but selling any of those stocks short, before the impending credit crisis was realized by the public would have been brilliant.
     
  18. get_nick

    get_nick These snozzberries taste like snozzberries... VIP

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    well, i know that google will rebound. it has a target price of $650. i was just going to hit the short, buy, then sell at the target price.
     
  19. cheese9988

    cheese9988 Senior Member VIP

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    The company has already gone bankrupt. People keep recommending that I buy the stock, I just had a hard time believing that I could make a bunch of money when Delphi emerges from bankruptcy. So I asked the stock experts....on Hondaswap haha.

    I didn't buy any google, but I bought mastercard when it first started trading and made out like a bandit.
     
  20. totalburnout

    totalburnout Well-Known Member VIP

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    Visa's IPO is this month, but you need a massive amount of backing to be eligible for that IPO after Mastercard did so well with their IPO.
     
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