Bankrupcy and the stock market...

[stupidzbu]

i'm lost here....

today PG&E filed for chap 11... and both PG&E and SCE stocks were put on halt... so the prices wouldn't drop to SICK low levels....

PSI NET... a DSL company... stock was also frozen on monday i believe...

now here is my question... WHAT HAPPENS NEXT?

i own 2100 shares of PSI NET... and can't trade them.. and I can GARUNTEE that once the stock gets trading.. it will go down to nothing (basically becuase the comapny said if they do survive.. their common stock will have no value...) ....

so... what happens to everyone with PG&E or SCE or PSIX stock? can anyone explain what happens once a stock gets frozen.. and what determines when it gets trading again?

[giambona]

I'm not sure about this, but I think that once they pay off their creditors, first the people who own preferred shares (like the executives) of the stock get money back. If anything is left over, it goes to the holders of regular stock.
Same thing is happening to me with my TWA stock.

[Jeffbx]

Yup, what giambona said. Secured creditors first - mainly employee payroll & bank loans. Then preferred stockholders, and then common stockholders get the scraps. Yes, my company went belly up as well.

[TheLoneGunman]

I read some of the statements by PSI Net and they are clearly stating (for fear of lawsuits if they are not so blunt) that they can't pay their bills and they do not expect the situation to change.

Therefore, with less money than bills, your stock is worthless.

You have three choices:

Sell at pennies once it gets back on the market and hope to make at least enough for a pizza (remember the sales commission)

Ride it into the ground and hope to get something. (This happened to me with Pets.com, but I chickened out at the last moment and sold just hours before the company evaporated. This was because they said I MIGHT get $0.25 per share over 3 years and $0.13 now seemed like a better deal)

Donate the stock to charity (the big ones can do all the paperwork for you). This way you can take a 100% loss on your taxes and also do some good (but the charity will only make about as much as you would in choice #1)


Sucks to be you. I have been there a few times.

[m0j0]

i have stocks....but i am afraid to look

[stupidzbu]

Originally posted by TheLoneGunman

Donate the stock to charity (the big ones can do all the paperwork for you). This way you can take a 100% loss on your taxes and also do some good (but the charity will only make about as much as you would in choice #1)

ok... so lets say i want to donate HALF my shares to charity.. just to be on the safe side.. incase some MIRACLE does happen and the stock recovers (plausible if the market recovers within the next 3 months... so really.. there is probably NO HOPE...)...

would i be able to claim a loss on the stock donated??

who would I donate to?

any websites with more info?

hehehehe.. whoda thunk it... 98-99 alot of companies go IPO... 00-01 .. most of em are going chap 7, chap 11, or just dissappearing off the damn face of the planet! WOO HOO!!

GO ANARCHY GO!!!

[TheLoneGunman]

In terms of PSI Net specifically, there is *NO* chance of recovery.

They simply owe MANY, MANY, MANY, MANY times more than what they can ever raise.

Because I am Jewish, I know a few of the major Jewish charities will take the stock, but I am not sure about other places. I figure United Way might. Just call around.