No Soup for Nortel Shareholders

Delisted from the TSX and NYSE, Nortel only trades in the pink sheets now.

Trading bankrupt stocks is brainless, futile, and investors will lose it all. It is astounding they trade at all before companies cancel their shares, as if a 99.9% loss isn't good enough for investors being fed Kool-Aid so long, with their largest asset a tax write-off they could never claim on books they extended cleaning so long.

Other red flags may be fraud, revisions, delays, reverse splits, lack of transparency, contradictions, bonuses, etc., with which Nortel has been the poster boy of wrongdoing.

Delisted on TSX, NYSE, it trades at around one third of a penny presplit, when even this is too high relative to zero and when it should not be trading at all already.

http://www.fool.com/investing/general/2008/09/1…

Buying shares of companies in bankruptcy monumentally bad idea. You're probably going to lose it all

If the company can't generate enough capital to pay off its creditors, then it will slide down the scale to Chapter 7, complete liquidation.

equity shareholders are quite literally the last people in line to receive something from the bankruptcy. They're behind the debt holders, behind the merchant creditors, behind the trustees, behind the employees, behind the tax man, and behind even the preferred shareholders.

In most cases, the company will have to sell off assets to raise money to pay creditors. In almost all cases, these proceeds are going to be insufficient to pay off all prioritized creditors in full (after all, why else would the debtor have had to file in the first place?)

So, potential speculators, bottom dwellers, and Dumpster divers, the answer is that as a rule, investing in bankrupt companies (or even soon-to-be bankrupt companies) is a horrible idea.

I'm in fact baffled that the SEC and the exchanges even allow companies in Chapter 11 to trade at all — the implied return on the vast majority of these companies is exactly zero.

http://bankruptcymaster.com/News/Bankruptcy/New…

“bankrupt companies, seem to trade, though nobody can give any reason why they should. There's usually no meaningful value left.”

SCAM ALERT. Troubled companies also often are the subject of rumors -or downright fraud by swindlers -in Internet chat rooms. The rumormongers hope to profit from a short-term rise in the stock price. “This is very common. I see it all the time,” says Brandt.

“BRAINLESS” TRADING.

The best bankruptcy strategy for all but the most daring is usually to sell, which creates a tax benefit, say analysts.

Better yet, advise most, don't buy the shares – no matter how cheap.Trading these stocks is downright futile, “even brainless,” he says.

http://www.marketwatch.com/

“It's very unlikely that a company will come out of bankruptcy without canceling its shares, said John Nestor, director of public affairs at the Securities and Exchange Commission.

“We are aware that people continue to invest and people lose money,” Nestor said.

“a sale establishes a tax loss while holding may not,” he says.

F#*CK'IN DIE ALREADY

What if they're lying about this, too? They lied about everything else!

ass clowns

Who came up with this “bankruptcy protection” idea, anyway…. oh, yeah…. I forgot…. THE LAWYERS!!

wow, I am just shocked.. blown away, by this unofficial affirmation…I really, really thought, in fact “banked” on the fact that they would be worth something..
Now, if only it were April 1.. aka April fools Day.

I think that Nortel has to keep annnouncing these things. Whilst they may seem obvious to us, there will always be someone who triefd to sue them for a lack of warnings once they finaly realise their shares are worth jack.

a small fraction of a penny (.0025 cents) pre-split
relative to a $80 high… may as well already be zero for shareholders..even if they didn't cancel their shares there would be nothing left… overkill to zero, nadda, squat… won't even buy a coffee let alone soup

reverse split was to draw institutions they said…among so may revisions, triple profits, bonus fraud, extending repair, etc…is it any wonder… with this level of mass orchestration and support it should be the largest fraud on earth, not the 3rd largest, and certainly the largest in fraud haven Canada, a sanctuary for big business barons and tyranny with a lax overpaid OSC

… a joke, a riot, to be seen to be believed… as many suffer indefinitely in its wake and they conveniently disappear as conveniently as the past board timely resigned after plea bargain and the new board's CEO tanked ultimatum settement /promoted pals… Canadian stocks to support our economy anyone? Nortel was a blue chip once wasn't it? Pales Enron with hardly any consequences than greater damages as those robbed can do as much as their employees and pensioners.

There were restrictions set forth earlier by the company so no one could buy controlling interest because shares were so cheap…

As a Preferred “DEBT” holder I can't tell you how “angry” I am , NO VOTING RIGHTS… OFFERED DEBT AT $25 PER SHARE TO CANCEL OUT OLD DEBT & NO CAPITAL GAIN (unlike common share holders) AND A INTEREST PAYMENT….JUST LIKE BOND HOLDERS , yet they gloat over this “Preferred shareholder s will get F-ALL” , this is DEBT , not equity. In the 21 page prospectus it states clearly that Preferred's rights upon liquidation whether VOLUNTARILY OR INVOLUNTARILY will receive $25 per share. Now I know that dep on how much money is in the pot , but clearly , its bankruptcy , everyone should go in the blender and if its 10 cents or 50cents on the dollar ? preferential treatment for SECURED DEBTORS? .. Its Bullshit and no where in CCAA proceeding does it state who gets what in what order. Nortel could have offered a DEBT for EQUITY swap if they really wanted to survive, they had 2.4B in the bank when they filed for Ch11 This is a heist and is designed to clean out the Employee's and SHARE HOLDERS. $380,000,000,000 was Nortels Market Cap at the height of the tech bubble .. that stock was sold to SOMEONE (though not the smartest investors at 20x book) Now its all reduced to ZERO , and now those middle class people can lick there wounds and go BACK TO WORK … its by design , don't kid yourself.

I am shocked! Shocked that the shareholders will get nothing!

Now that they hold over $8 Billion in cash, is that not sufficient to pay of the debtors and share holders.