B767Driver said:
This is exactly right. I don't understand why the SEC allows this type of activity...buying stock in a bankrupt company. After all, SEC is supposed to protect consumers/investors from getting hurt.
Well, the SEC is supposed to prevent people from losing their money due to fraud. If you don't understand what you're buying, and there's no fraud involved, it's your own fault.
I remember US Airways putting out statement after statement about how their stock would be worthless once the chapter 11 reorg went through, yet people were STILL buying the stock.
When a company says, this stock ain't gonna be useful for anything other than wiping your butt with the certificate, if you got one, and people still buy it, I don't know what you can do.
Caveat emptor, right?
Back in the day of the full service broker, you'd get someone telling you, no, don't buy that stock, it ain't worth the paper it's printed on.
But now, with the do it yourself brokerages, people who don't know what they're doing say, hey, I see Delta stock for a nickel a share, and when they come out of bankruptcy, it will be worth more. I'm gonna buy it. And there's nobody to tell them why that's pissing their money away.