Delta Fares

Why do people continue to trade or buy stock in a bankrupt airline (DELTA).?

If existing Delta airlines (DALRQ.pk) stock is certain to be worthless when they emerge from bankruptcy why do people continue to trade or buy it? Is it a 100% certainty that it becomes worthless?

Public Comments

1. well it is a good time to buy alot of stock, when they come out in the long term it will eventually rise in price bankrupcy doesn't mean the company is dead it is just under reconstrunction. but hey what do I know
2. large companies rarely go out of business and eventually make it out of bankruptcy, look at Kmart, 3yrs ago their stock was selling for 10 cents a share and now look at it.
3. Well, if Delta is in such bad shape right now, it probably means that their stock prices are quite low. People buy stocks when they are low with the hopes that the company will make improvements, make a turnaround, or dig themselves out of the hole, and become popular and succesful again. If or when that happens, the stock price will shoot up and those people who made that kind of prediction will be sitting on some pretty nice pocket change. It could be that some people think they have good insider information or some sort of insite to the company's future.
4. People hope they will come out of it but you should remember when a company files bankruptcy they can void their stock. It is a low level liability. Kmart did that in their bankruptcy. They simply declared their stock void & issued (sold) new. The old stockholders were left holding the bag.
5. People believe what they want to. The earlier answer for Kmart from Nikomat is completely wrong. Kmart stock was selling at 10 cents but that stock became worthless. The company canceled that stock and left shareholders out to dry. They then reissued new stock after the bankruptcy and that is the stock that rose. Not every company decides to leave shareholders up in the air. Some will issue new stock in place of the old, some will give so many shares of new stock for old. If you pay less than a dollar for the stock and it starts going up you can make a bundle but like any stock you take your chances. It's great when you make money but you should never invest what you can't afford to lose.
6. For exactly the same reason people continue to smoke even when they already know there is a 100% certainty that they will die earlier.