Should You Buy Shares of American Airlines Stock – Ch 11 Bankruptcy

hey this is Jeff wrote a good financial sense I’m been getting a very common question as you know American Airlines just recently filed for chapter 11 bankruptcy and I’ve had several clients that want to get in and buy some American Airlines stock hoping that it will recover and get back to its hadeya that it was just a year or so ago but here’s the thing what happens when you buy a stock that files for bankruptcy does it really have the chance of surviving the chapter 11 bankruptcy and coming out of it most likely the answer is no now keep in mind whenever a company files for bankruptcy and they’re going through this reorganization it’s the debt holders that are first aligned to claim any of the debts whenever asked this were to be sold so the common shareholders are actually last so the likelihood of them getting out of it is slim to none now does that mean that it can’t happen sure it could but it’s not something that I feel is most likely going to happen so if you do buy some American Airlines stock most likely will happen is that the stock that you own so the paper certificate that you own will become worthless and then if American Airlines does survive the bankruptcy where they sell off their debts and just get rid of all the junk that they had on the books then what will most likely happen is they’ll actually reissue new stock and then if you want to buy and invest back in America American Airlines you would have to and the stock that you used to own is worthless couple examples that that’s happened to was Kmart which happened mmm about eight or so years ago I believe most recently was General Motors GM both those two companies went through the bankruptcy process all the stock that they had were deemed worthless and if you want to buy new stock you had to pony up and buy the new stock if you want to have ownership in that company the question is should you buy American airline stock now granted it is a small investment I had a client that want to buy a thousand shares and at the time it cost him about three hundred and eighty-five dollars to buy it so if you have a lot of money investing a little bit’s not going to break you but if you think that you’re going to be making a big deal and walking away like you’ve struck the lotto most likely that’s not going to happen so if you have more questions you know where to find me goodfinancialcents.com we’ll see you again