Allstocks.com's Bulletin Board: shorting a bankrupt stock

This is topic shorting a bankrupt stock in forum General Investing Topics at Allstocks.com's Bulletin Board.

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Posted by treemoney on :

I have heard that if a person owns a stock and the company goes bankrupt usually they cancel the shares and the person would loose there money. I was wondering what would happen if a person shorted a stock and the company later filed for bankruptcy. The person who shorted never technically owned the stock until he would cover it. But if the shares get canceled how could he cover.

Posted by Machiavelli on :

If he doesn't cover he will be in big doo doo with his broker etc...

Posted by podcaster on :

machiavelli----
you do have a way with words LOL

Posted by BuyTex on :

ooops: short a stock that goes bankrupt? walk away scot free...there's "nothing" to cover

Posted by podcaster on :

quote:
Originally posted by treemoney:
I have heard that if a person owns a stock and the company goes bankrupt usually they cancel the shares and the person would loose there money. I was wondering what would happen if a person shorted a stock and the company later filed for bankruptcy. The person who shorted never technically owned the stock until he would cover it. But if the shares get canceled how could he cover.

treemoney-- as i understand it, many Q stocks continue to trade even after the bankruptcy. the new issue has a "V". i know that doesn't clear up the question, but it's a start [Razz]