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Question for finance people in the know. WeWork stock is still trading at $1.15 a share. Why hasn't it gone lower? Equity investors will get nothing in a bankru
by hn_throwaway_99 3y ago
Question for finance people in the know. WeWork stock is still trading at $1.15 a share. Why hasn't it gone lower? Equity investors will get nothing in a bankruptcy, so are these people who are buying at $1.15 really thinking there is some miracle by which WeWork won't go bankrupt and equity investors will make out, or is there some other scenario I'm unaware of where WeWork goes through Chapter 11 but somehow common shareholders aren't totally wiped out?
- shawndrost 3y agoThere is another scenario. Equity investors sometimes get something during a bankruptcy. This is what happened to Hertz. (IIRC Hertz was selling shares to retail investors during bankruptcy, the SEC put a stop to it, and then Hertz made a miraculous recovery and it turns out the SEC was really just preventing wholesome capital formation and a win for the little guys.)
- kjkjadksj 3y agoBig popular companies nearing bankruptcy is ripe for a lot of volatility in the stock price due the retail meme behavior. If you time your entry and exit perfectly here your returns could be in many multiples of your initial investment. E.g. on sept 12 wework stock almost doubled in price in a single day of trading.