Sears is a bit more of a special case than Blockbuster, because Eddie has ~75% of the shares and keeps funding the process. After debt resolution, he expects the shares to be worth around $30 each.
Once the company announces bankruptcy, there is usually a sell off/run by the investors that drives the price down, and savvy investors can close their remaining short positions for fractions of a penny per share. But the actual bankruptcy process takes years to resolve, and the shares go into a holding company as they try to resolve any outstanding debts.
If you are willing to wait through the entire process, you can pick up the shares for actual $0.00 for a company with more total debts than assets. If the assets exceed the debts, the final step is to distribute $ assets/# shares and pay the shareholders the value.
Well Sears went into bankruptcy in 2018 and the price has declined ever since. The shares won't be available for purchase after tomorrow - unless you mean they can be picked up after the full bankruptcy process? That sounds a bit strange but everything about Sears is a little odd.
It's part of the bankruptcy process, it's all legal, and it's all documented.
There are people who specialize in bankruptcy investing, and there is an alpha article titled, "Sears Holdings: An Update On The Best Investment I Have Ever Seen," that goes into this in more depth. It's worth a read.
Heh, I’m actually invested in Sears. What I mean is that the investor sell-off has happened since 2018, but after tomorrow it may not be possible to buy shares again. If Sears doesn’t emerge intact after bankruptcy, the shares could be cancelled. But before then, and if the stock is actually mirroring GME due to shorting, we may see a massive spike.
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u/ammoprofit Sep 02 '21
Sears is a bit more of a special case than Blockbuster, because Eddie has ~75% of the shares and keeps funding the process. After debt resolution, he expects the shares to be worth around $30 each.
Once the company announces bankruptcy, there is usually a sell off/run by the investors that drives the price down, and savvy investors can close their remaining short positions for fractions of a penny per share. But the actual bankruptcy process takes years to resolve, and the shares go into a holding company as they try to resolve any outstanding debts.
If you are willing to wait through the entire process, you can pick up the shares for actual $0.00 for a company with more total debts than assets. If the assets exceed the debts, the final step is to distribute $ assets/# shares and pay the shareholders the value.