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Treemoney
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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.
Posts: 205 | From: ca | Registered: Aug 2005  |  IP: Logged | Report this post to a Moderator
Machiavelli
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If he doesn't cover he will be in big doo doo with his broker etc...

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Let the world change you... And you can change the world.

Ernesto "Che" Guevara de la Serna

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

Posts: 229 | From: new mexico | Registered: Apr 2005  |  IP: Logged | Report this post to a Moderator
T e x
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ooops: short a stock that goes bankrupt? walk away scot free...there's "nothing" to cover

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Nashoba Holba Chepulechi
Adventures in microcapitalism...

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podcaster
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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]
Posts: 229 | From: new mexico | Registered: Apr 2005  |  IP: Logged | Report this post to a Moderator
   

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