Stuckholder

DEFINITION of 'Stuckholder'

The owner of a stock that can't be sold. The term stuckholder has a negative connotation, usually because the value of the stock is dropping and circumstances prevent the owner from liquidating the position.

BREAKING DOWN 'Stuckholder'

The Securities and Exchange Commission (SEC) can suspend trading on a stock to protect investors or the public. For example, if a company does not file the correct reports in a timely and accurate manner, the SEC can put a hold on trading for up to 10 days. Once trading resumes, the stock tends to automatically fall in value due to the uncertainty associated with the violation. Stuckholders are stuck with this position when trading is suspended, even though they know that the value of the stock will drop.

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