Investing in a Bankrupt Company: A High Risk Venture
The SEC and FINRA are issuing this Alert because we believe there may be widespread misunderstanding by investors that stock in the "old" General Motors Corporation (now known as Motors Liquidation Company) is related to the "new" General Motors Company (new GM). FINRA halted trading in old GM (which had been using the GMGMQ trading symbol) on July 10, 2009, and has since issued a new ticker symbol for the old GM stock—MTLQQ—to avoid having it confused with the new GM, which currently has no publicly traded securities.
This Alert also reminds investors that holding shares of any company involved in bankruptcy, or buying shares in a bankrupt company in the hope that those shares will surge in value down the road, are highly risky courses of action.
Furthermore, as with the GM situation, companies in bankruptcy are often the subject of rumors in fax or email newsletters, Internet message rooms or on Web sites offering online stock tips. Unfortunately, investors may have received confusing, potentially misleading, information about the old GM. As recently as last Friday (July 10, 2009), newsletters and other promoters have touted the purchase of the stock.
Two Distinct Companies
Motors Liquidation Company and the "new" GM are separate and distinct.
As stated on the Web sites of both Motors Liquidation Company and the new GM, the new GM currently has no publicly traded securities, and none of Motors Liquidation Company’s publicly owned stocks or bonds are or will become securities of the new GM. Motors Liquidation Company is currently winding its way through bankruptcy court—and there is a real possibility that stockholders will receive nothing from these proceedings. While the common stock of Motors Liquidation has not been cancelled, investors should not interpret that as indicating the shares have any value.
FINRA - Investor Alert - Investing in a Bankrupt Company: A High Risk Venture
Talk about the topic please, not what some other poster might think
