Question for any United pilots and/or people that know stock info

[capt. megadeth]

When a co. is in bankruptcy and reemerges, does the old stock always get cancelled?

Since the old UAL stock was cancelled, does that mean that the employees that held old stock are SOL or do you get the same amount of shares of the new stock that you had of the old stock?




Disclaimer: I know I sound like a dummy, but I really don't know a lot about the stock market.

 

[Andy]

When a co. is in bankruptcy and reemerges, does the old stock always get cancelled?

Since the old UAL stock was cancelled, does that mean that the employees that held old stock are SOL or do you get the same amount of shares of the new stock that you had of the old stock?

Disclaimer: I know I sound like a dummy, but I really don't know a lot about the stock market.

Yes.
It means that those that held now have very expensive wallpaper (as in stock certificates). Those that held got nothing when the stock got cancelled. On (extremely) rare occasions, old shareholders receive something when a stock is cancelled.

As for not knowing a lot about the stock market, I suggest that you read quite a bit and watch CNBC before you think about choosing your own investments. If you find that it's boring (it was boring to my ex-wife, but her passion in life is spending money, not saving it), you would be better served by finding a decent mutual fund and parking your money there. If you decide to go the mutual fund route, I recommend the Vanguard family of funds due to the low fees. Any mutual fund can be red hot for a short period of time, but they all tend to gravitate toward the mean over the long term (as with anything, there are exceptions to this rule).

 

[Flying the Line]

I believe this is how the new stock is issued.

There were three companies (Chase, Citi, and JP morgan I think) that put up the debtor in possession money.

Those three companies plus the creditors and the management hold all the new stock (125M shares) and the stock that is traded day to day is what the new share holders are selling. The price is set by the investment companies that issue the shares, and the stock price after the issue is market driven.