Buying Stock In Bankrupt Companies May 2026

The type of filing determines the fate of the company and its shares:

When a company files for bankruptcy, its shares typically continue to trade, but the environment changes significantly: buying stock in bankrupt companies

: Usually receive nothing unless all higher-tier creditors are paid in full. Chapter 7 vs. Chapter 11 The type of filing determines the fate of

: Delisted shares migrate to over-the-counter (OTC) markets, such as the OTC Bulletin Board or Pink Sheets. its shares typically continue to trade

Buying stock in companies that have filed for bankruptcy is a high-risk strategy that often results in a total loss of investment. While there is no federal law prohibiting the trading of these securities, the legal priority of claims usually leaves common shareholders with little to nothing.