Are there high-priced shares of quasi-bankrupt companies that are "traded just for fun"?
Are there high-priced shares of quasi-bankrupt companies that are "traded just for fun"?
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B K · External communityPost link
External question — Personal Finance Stack Exchange
Author: B K
Original post: https://money.stackexchange.com/questions/126924
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
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Suppose that some successful popular company X, whose shares are highly priced and very actively traded, suddenly ceases to be successful and goes almost completely bankrupt. However, it still exists formally and its shares can be traded. Normally, in such a case, the stock will turn into a penny stock and stay like this unless the company becomes sucessful again.
However, it could happen that traders or (former) shareholders get nostalgic of the good old days when company X was big, and so they buy some of the penny stock shares just to have them in their portfolio "for fun". If enough traders do that, the price of the shares will actually rise and might finally leave the penny stock sector without the company doing any better. While usually one would expect such a "bubble" to burst after some time, it is thinkable that the shares of company X become "collector's objects" that people buy not because they think that the company is actually worth anything but for the same reasons that people buy football stickers, pokémon cards, etc.
In the end, the shares of the company might even trade consistently at a comparable or even higher price than when the company still existed as working business.
Has this ever happend?
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