Originally Posted by
Capt Scribble
Vikdream. The company is bankrupt and there is no way of repaying the debt holders. The only hope is that new shares are created and swapped for the debt, in the hope that the company survives and the shares gain in value. The debt is eliminated. Shares are sold at some future date salvaging some of the lenders money. As part of the process, the existing shareholders are almost wiped out as to create new shares the original number will be diluted by a large factor. Seen it happen several times, Lost my money but kept my job, until the last crash when everything went! If you can’t afford to loose it don’t invest!
I wonder how many can do this, and so they can borrow more money.